Question

Jackson deposited $5000 at 3.8% interest compound continuously when he was 18 years old. How much will be in the account when he is 40 years old if he made no other deposits or withdrawals

Answer 1

Answer:

$11535.60

Step-by-step explanation:

We have been given that Jackson deposited $5000 at 3.8% interest compound continuously when he was 18 years old.

To find the amount that Jackson will earn when he is 40 years old, we will use compound interest formula.

$A=P\cdot e^{rT}$

A= Amount after T years.

P= Principal amount.

e= Mathematical constant e.

r= Interest rate (in decimal form).

T=  Time in years.

Let us convert our given interest rate into decimal form.

$3.8\text{ percent}=\frac{3.8}{100}=0.038$

Upon substituting our given values in above formula we will get,

$A=5000\cdot e^{(0.038\times (40-18))}$    

$A=5000\cdot e^{(0.038\times 22)}$

$A=5000\cdot e^{0.836}$

$A=5000\cdot 2.307120015126555$      

$A=11535.600075632775\approx 11535.60$

Therefore, Jackson will have $11535.60 in his account when he is 40 years old.