Compound interest differential equation | Lecture 7 | Differential Equations for Engineers

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Derivation and solution of the compound interest differential equation.

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Thank you! This helped a lot. I was stuck setting up the DE. have a great day

stellanhughes
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What if you take any money out of that account? Would you make a new variable and multiple it by t and subtract it from s(t).?

antiquarian
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how about the general form of compound interest, dS/dt = p(t)*S + f(t), S(0) = S_0

yukkbisaguys
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what would be the formula for a FV of a forward contract with a dividend pay in between?

luismiguelvictoria
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Good sir.... Aesthetic explanation 😌😌😌😍

MaheshKumar-buuq
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Is it me or is the audio getting ahead than the video? Oh i had it backwards

stemstudentph
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Somehow the formula you derived for S(t) is not correct. Because you are using continuous compounding, the interest rate r should be adjusted. In Engineering Economy, we convert the interest rate r which is the nominal interest rate into effective interest rate. In this case, the effective interest rate will be (e^r - 1). The term k/r will replace with k/(e^r - 1) in the above formula for S(t).

arialcad