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Westkost [7]
3 years ago
13

MAJORR HELP!!!

Mathematics
1 answer:
WINSTONCH [101]3 years ago
8 0

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

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