Review the compound interest formulas for n compoundings per year and for continuous compounding we learned this week. Do a quick check of the various interest offering from your favorite bank and then design a saving plan that would give you the most satisfactory savings in at the end of 2030 if you have only 5 extra dollars to be put away every day?

Extended Application: Compound Interest Summary of Compound Interest Formulas Let P be the amount deposited, t the number of years, A the balance, and r the annual interest rate (in decimal form). 1. Compounded n times per year: A = P(1 +- p(1+2) 2. Compounded continuously: A = Pe" In general, the effective rate corresponding to a nominal rate of r that is compounded n times per year is Effective rate 1 + - 1. n = 1 reff n 16 Extended Application: Compound Interest Summary of Compound Interest Formulas Let P be the amount deposited, t the number of years, A the balance, and r the annual interest rate (in decimal form). 1. Compounded n times per year: A = P(1 +- p(1+2) 2. Compounded continuously: A = Pe" In general, the effective rate corresponding to a nominal rate of r that is compounded n times per year is Effective rate 1 + - 1. n = 1 reff n 16