Lux Investing

What is the value of $1, invested for one year at 100% interest, compounded infinitely?

Public Comments

1. infinite money
2. Do your own homework!
3. A = P e ^rt) P=1 r=1 t=1 A=e
4. this is an incomplete question 100% interest I get but is it annual interest rate or monthly or quarterly. take a penny and double it every day for a month or one million dollars which would you take?
5. good question: We use the formula : FV = PV ((1+r)^n) where PV = $1 n = 1 The "r" MUST become compounded annually, because the money in being invested for one year. Right now, it is compounded infinitely. So the formula for turning an "r" compounded infinitely into an "r" compounded annually is: e^k - 1. Where "k" = 100% or simply "1". And "e" is Euler's Number = 2.7181..... So e^1 -1 = 1.7181...and THIS is your "r" for the formula at the top so FV = 1((1+1.7181)^1) FV = $2.72 (rounded to two decimal places) hope that helps