Question

MAJORR HELP!!!

Answer 1

Answer:

a)$1628.90

b)$1647.00

c)$1648.72

Step-by-step explanation:

The question is on compound interest.

The formula to apply here is;

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

where

• P=principal /beginning amount
• r=interest rate as a decimal
• n=number of compoundings a year
• t=total number of years

a) If compounded annually, n=1

p=$1000, r=5%=0.05 t=10

Amount will be;

$A=1000(1+\frac{0.05}{1} )^{10} \\\\\\A=1000(1.05)^{10} \\\\\\A=1000*1.6289=1628.90$

Amount=$1628.90

b) If compounded monthly, n=12

p=$1000, r=5%=0.05, t=10, n=12

$A=1000(1+\frac{0.05}{12} )^{12*10} \\\\\\A=1000(1.0042)^{120} \\\\\\A=1000*1.647=1647$

Amount=$1647.00

c)If interest compounded continuously, it means the principal is earning interest constantly and the interest keeps earning on the interest earned.Here the formula to apply is;

A=Pe^rt where e is the mathematical constant e=2.71828182846

Hence the amount will be;

$A=Pe^{rt} \\\\\\A=1000*e^{0.05*10} \\\\\\A=1000*2.71828182846^{0.5} \\\\\\A=1648.72$

Amount=$1648.72