Question

Suppose $24,000 is deposited into an account paying 7.25% interest, which is compoundedcontinuouslyHow much money will be in the account after ten years if no withdrawals or additional depositsare made?

Answer 1

Answer:

$49560

Explanations:

The amount deposited is the principal

The principal, P = $24,000

Interest rate, r = 7.25% = 7.25/100 = 0.0725

Time, t = 10 years

Since the interest is compounded continuously, the amounte^ formula is given as:

$A\text{ = P}\times\text{e}^{rt}$

Substitute P = 24000, r = 0.0725, and t = 10 into the formula above:

$\begin{gathered} A\text{ = 24000}\times e^{0.0725(10)} \\ A\text{ = 24000}\times e^{0.725} \\ A\text{ = }24000\text{ }\times\text{ }2.065 \\ A\text{ = }49560 \end{gathered}$

$49560 will be in the account after 10 years if no withdrawal or deposit is made