Question

If you deposit $10,000 in an account earning interest at an 8% annual rate compounded continuously, how much money is in the account after five years?

Answer 1

Answer:

A ≅ 14918.3 $

Explanation:

Given that;

Total deposit (i.e our Principal given is) = $10,000

Annual Rate Compounded Continuously = 8%

Time = 5 years

Because the account is compounded continuously; we go by the formula;

$A= Pe^{rt}$

A = $10,000e^{(0.08*5)}$

$A=10,000e^{(0.4)}$

A = $10000*1.491824698$

A = 14918.24698

A ≅ 14918.3 $

∴ The amount of money that is present in the account after five years = 14918.3 $

Answer 2

Answer:14700

Explanation:

Solution

A = P(1 + r/100)n

Amount (A) =?

Principal (P) = $ 10,000

Number of years (n) = 5year

Rate yearly (r) = 8%

Substituting the values in to the formula

   = $ 10,000(1 + 8/100)^5

First we solve the bracket

   = $ 10,000(108/100)^5

   = $ 10,000(27/25)^5

= $ 10,000(1.08)^5

= $ 10,000(1.47)

= $ 14,700

Amount at the end of 5 year is $ 14700

Compound Interest C.I= A-P

= $ 14700 - $ 10000

= $ 4700