Question

Stanley Bank offers a money market account that earns 1.85% compounded continuously: a) If $10,000 is invested in this type of account, how much will it be worth in 3 years? b) How long will it take for the account to be worth $15,000?

Answer 1

Answer:

a) $1056.33 b) 23 years

Step-by-step explanation:

a) 10000(1+1.85/100)^3=10565.33 (2d.p.)

b) let x be the no. of years

15000 = 10000(1+1.85/100)^x

1.5 = 1.0185^x

ln both sides

ln 1.5 = x ln 1.0185

x = ln 1.5/ln 1.0185

=22.11

=23 years (rounded up)