FInancial

Advisor
Project
Erica Wilson
p.3

Compoun
ded
continuou
sly
A=Pert
A=$2,000
P=$1,000
r=0.022
t=?

2,000=1,000e0.022t
2,000/1,000=1,000e0.022t/1,000
2=e0.022t
ln2=0.022t
.69=0.022t
.69/0.022=0.022t/0.022
t=31.51

4.25%
Compoun
ded
ANNually
A=P(1+r)t
A=$2,000
P=$1,000
r=0.0425
t=?

2,000=1,000(1+0.0425)t
2,000/1,000=1,000(1.0425)t/1,000
2=1.0425t
log1.04252=t
t=16.65

3.2%
COmpoun
ded
monthly
A=P(1+r/k)k*t
A=2,000
P=1,000
r=0.032
k=12
t=?

2,000=1,000(1+0.032/12)12t
2,000/1,000=1,0001.003)12t/1,000
2=1.00312t
log1.0032=12t
231.39=12t
231.39/12=12t/12
t=19.28

2.4%
Compoun
ded
Quarterly
A=P(1+r/k)kt
A=2,000
P=1,000
r=0.024
k=4
t=?

2,000=1,000(1+0.024/4)4t
2,000/1,000=1,000(1.006)4t/1,000
2=1.0064t
log1.0062=4t
115.87=4t
115.87/4=4t/4
t=28.97

1.7%
compoun
ded
annually
A=P(1+r/k)kt
A=2,000
P=1,000
r=0.017
k=1
t=?

2,000=1,000(1+0.017/365)365t
2,000/1,000=1,000(1.00004658)365t/1,000
2=1.00004658365t
log1.000046582=365t
14,881.14=365t
14,881.14/365=365t/365
t=40.77

3.5%
COmpoun
ded
Yearly
A=P(1+r/k)kt
A=2,000
P=1,000
r=0.035
k=1
t=?

2,000=1,000(1+0.035/1)1t
2,000/1,000=1,000(1.035)t/1,000
2=1.035t
log1.0352=t
t=20.15

What was the same?

In all of the equations used, we had to
double the amount of money used. So in
each equation, the same total and starting
number were the same.

Tripling the money

Instead of having A as $2,000, you would have A as
$3,000 in order to triple the money. You would still
start with $1,000. The order in which how long
would stay the same except the time would just
become longer.

Results
Based on the results, I would recommend
for my customer to go with the bank that
offers 4.25% compounded annually. You
will get more money quicker compared to
the other options.