Thinking Mathematically (6th Edition)

Published by Pearson
ISBN 10: 0321867327
ISBN 13: 978-0-32186-732-2

Chapter 8 - Personal Finance - 8.4 Compound Interest - Exercise Set 8.4 - Page 523: 65


The statement does not make sense.

Work Step by Step

The statement does not make sense. If a bank increases the number of compounding periods per year indefinitely, this is called continuous compounding. There is a simple equation to calculate the value of an investment with continuous compounding. $A = P~e^{rt}$ Although this kind of compounding interest is a good investment for customers, from this equation, we can see that the bank does not need to give an infinite amount of money.
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