Question

"In 1820 a William Record of London, England, deposited $0.50 (or the equivalent in English pounds sterling) for his granddaughter in the Bank of London. Unfortunately, he died before he could tell his granddaughter about the account. One hundred and sixty years later, in 1980, the granddaughter's heirs discovered the account. What was the value of the account if the bank paid an annual interest of 6% compounded continuously?"

Answer 1

Answer:

amount = $5596.40

Explanation:

given data

deposited amount = $0.50

annual interest = 6% = 0.06

time period = 160 year  ( 1980 - 1820 )

solution

we apply here compounded annually that is

amount = deposit amount × $(1+r)^{t}$      ...............1

put here value and we will get

amount =  $0.50 ×  $(1+0.06)^{160}$  

solve it we will get

amount = $5596.40