Exponential growth and compound interest

In summary, a user sought verification on their solution for a problem involving exponential growth and compound interest. They received feedback that their answer was close, but not entirely accurate. The user also asked about rounding and was advised to keep full calculator accuracy during computations and round off the answer only at the end.
  • #1
alexandria
169
2

Homework Statement


upload_2016-5-23_19-49-18.png


Homework Equations


upload_2016-5-23_19-49-28.png


The Attempt at a Solution


here is my attempted answer, can someone please verify if my method is accurate and if my solution is correct? thanks for the help!
upload_2016-5-23_19-50-8.png
 
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  • #2
alexandria said:

Homework Statement


View attachment 101163

Homework Equations


View attachment 101164

The Attempt at a Solution


here is my attempted answer, can someone please verify if my method is accurate and if my solution is correct? thanks for the help!
View attachment 101165

Your method is OK, but I get $14644.18 instead of your $14598.54.

Also: do NOT use the exact same title "exponential growth and compound interest" for two different threads. When you do that it makes it harder for other readers/helpers to navigate your PF threads.
 
  • #3
i think its because i didnt round 0.005208333
would my answer still be considered right, or is it better to round ??
 
  • #4
alexandria said:
i think its because i didnt round 0.005208333
would my answer still be considered right, or is it better to round ??

Well, the correct answer is $14644.18, while your answer is $14598.54. Admittedly, the difference ($45.64) is not very large compared to the base values, but nevertheless one answer is not correct, no matter how you look at it.

As to rounding: I cannot answer that question because you do not specify what accuracy you round to. Generally, though, it is best to keep full calculator accuracy during your computations, and round off the answer only at the end.
 
  • #5
ok got it, sorry for the late reply, but thanks for the help!
 

1. What is exponential growth?

Exponential growth is a type of growth where the rate of increase is proportional to the current value. This means that as the value increases, the rate of increase also increases, resulting in a rapid growth pattern.

2. What is compound interest?

Compound interest is a type of interest calculation where the interest earned on an investment is added to the principal amount, and then the next interest calculation is based on this new total. This results in a compounding effect, leading to a higher return on investment over time.

3. How does exponential growth and compound interest relate to each other?

Exponential growth and compound interest are both based on the same principle of proportional growth. In exponential growth, the rate of increase is proportional to the current value, while in compound interest, the interest earned is proportional to the principal amount. This results in a compounding effect in both cases, leading to rapid growth over time.

4. What are some real-life examples of exponential growth and compound interest?

Some common examples of exponential growth include population growth, the spread of diseases, and the growth of social media platforms. On the other hand, compound interest can be seen in investments such as savings accounts, stocks, and bonds, where the interest earned is added to the principal amount and leads to a higher return over time.

5. How can exponential growth and compound interest be calculated?

The formula for calculating exponential growth is y = ab^x, where "a" is the initial value, "b" is the growth rate, and "x" is the number of time periods. For compound interest, the formula is A = P(1+r/n)^nt, where "A" is the final amount, "P" is the principal amount, "r" is the annual interest rate, "n" is the number of times the interest is compounded per year, and "t" is the number of years.

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