Compound interest
Choose an amount between $5,000 and $500,000 of extra capital for principal, P, the initial amount of money to invest.Choose between 5 and 30 years for t.
1. Compound interest: A equals P times the quantity one plus r divided by n raised to the n times t power.
2. Continuously compounding interest formula: A equals P times e raised to the r times t power.
- Explain how compound interest works in your own words.
- Explain the two different forecasting plans with pros and cons for each.
- Present your calculations for each plan. Be sure to state the formula and outputs.