*Using Matlab*

The current amount A of a principal P invested in a savings account paying an annual interest rate r is given by

A = P(1+r)^(nt)

where n is the number of times per year the interest is compounded. For continuous compounding, A = Pe^(rt). Suppose $10,000 is initially invested at 2.5 percent (r = 0.025).

a. Plot A versus t for 0 t 20 years for four cases: continuous compounding, annual compounding (n = 1), quarterly compounding (n = 4), and monthly compounding (n = 12). Show all four cases on the same subplot and label each curve. On a second subplot, plot the difference between the amount obtained from continuous compounding and the other three cases.

b. Redo part a, but plot A versus t on log-log and semilog plots. Which plot gives a straight line?

A=P(1+nr)nt where n is the number of times per year the interest is compounded. For continuous compounding, A=Pet. Suppose $10,000 is initially invested at 2.5 percent (r=0.025). a. Plot A versus t for 0t20 years for four cases: continuous compounding, annual compounding ( n=1 ), quarterly compounding (n=4), and monthly compounding (n=12). Show all four cases on the same subplot and label each curve. On a second subplot, plot the difference between the amount obtained from continuous compounding and the other three cases. b. Redo part a, but plot A versus t on log-log and semilog plots. Which plot gives a straight line? A=P(1+nr)nt where n is the number of times per year the interest is compounded. For continuous compounding, A=Pet. Suppose $10,000 is initially invested at 2.5 percent (r=0.025). a. Plot A versus t for 0t20 years for four cases: continuous compounding, annual compounding ( n=1 ), quarterly compounding (n=4), and monthly compounding (n=12). Show all four cases on the same subplot and label each curve. On a second subplot, plot the difference between the amount obtained from continuous compounding and the other three cases. b. Redo part a, but plot A versus t on log-log and semilog plots. Which plot gives a straight line