The formula for

FV = PV * (1 + rs/m) ^ mN

as m -> 8(infinity)

rs/m -> 0

&

mN -> 8 (infinity)

We then get:

FV = PV * (1 + 0) ^ 8

which equals

FV = PV * 1

FV =PV

Obviously wrong… however I can’t figure out where my mistake is…

The formula for

FV = PV * (1 + rs/m) ^ mN

as m -> 8(infinity)

rs/m -> 0

&

mN -> 8 (infinity)

We then get:

FV = PV * (1 + 0) ^ 8

which equals

FV = PV * 1

FV =PV

Obviously wrong… however I can’t figure out where my mistake is…

There it is.

I was using 8 to denote infinity…

Thanks JSD-NYC… wow was way off… my maths isn’t good enough to derive that in an exam environment seems I’ll just have to commit it to memory.

1^∞ is not necessarily 1.

Technically, 1^∞ is known as an indeterminate form. Other indeterminate forms are:

0 / 0, ∞ / ∞, 0^0, and ∞ − ∞.

All of these require calculus to evaluate.