Math Problem Statement

A 1-year loan with a 5% APR will have the most interest charged with what type of compounding?

Solution

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Math Problem Analysis

Mathematical Concepts

Exponential Functions
Compounding Interest

Formulas

Continuous compounding formula: A = P * e^(rt)
Other compounding formulas: A = P * (1 + r/n)^(nt)

Theorems

Compound Interest Theorem

Suitable Grade Level

Grades 10-12