Question

Suppose that $80000 is invested at 8% interest. Find the amount of money in the account after 3 years if the

Answer 1

Answer:

Compounded Annually: $100,776.96

Compounded Continuously: $101,699.93

Step-by-step explanation:

First, you are going to want to use the normal compound interest formula, which is shown below.

$A=P(1+\frac{r}{n} )^{nt}$

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

Change 8% into a decimal:

8% -> $\frac{8}{100}$ -> 0.08

Now, plug in the values into the equation:

$A=80,000(1+\frac{0.08}{1})^{1(3)}$

$A=100,776.96$

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To find the interest compound continuously, use the following formula:

$A = Pe^{rt}$

Now, plug in the values:

$A=80,000e^{0.08(3)}$

$A=101,699.93$