Banks that advertise 100x percent interest c d every instant calculate the balance in the account growing from an initial deposit of S1000 by the formula balance[t] = 1000 ex Explain where you think this formula comes from For a given interest rate of 100 x percent why does compounding every instant give the best deal to the customer? G.6.a.iv) Is there a significant difference between daily and g every instant G.6.a.v) "Rule of 72" If you get 100 x percent interest compounded every instant on an initial deposit of SK , then the balance in the account t years after the initial deposit is balance[t] - Ke To find how long it takes for the account to double, look at balance[t d] 2 balance[t] : ext exd_2ext ; Logge] = Log[2] xd=Log[2] ; Log[2] ; Now look at N[Log[2]1 0.693147 and explain why financial officers often make a rough estimate of the time it takes for an investment made at an interest rate 100 x percent to double by calculating For instance, a rough estinate of how long it will take money invested at 6 % to double is 72 100x In their heads. 72 -= 12 years A rough estimate of how long it will take money invested at 4 % to double is 72 -= 18 years This is called the Rule of 72