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ss7ja [257]
3 years ago
8

Using the continuous compounding equation, if someone invested $5,000 at an interest rate of 3.5%, and someone else invested $5,

250 at an interest rate of 3.2%, how long would it take for both accounts to have the same value? What value would both accounts have?
Business
1 answer:
UNO [17]3 years ago
7 0

Answer:

Therefore after 16.26 unit of time, both accounts have same balance.

The both account have $8,834.43.

Explanation:

Formula for continuous compounding :

P(t)=P_0e^{rt}

P(t)=  value after t time

P_0= Initial principal

r= rate of interest annually

t=length of time.

Given that, someone invested $5,000 at an interest 3.5% and another one  invested $5,250 at an interest 3.2% .

Let after t year the both accounts have same balance.

For the first case,

P= $5,000, r=3.5%=0.035

P(t)=5000e^{0.035t}

For the second case,

P= $5,250, r=3.5%=0.032

P(t)=5250e^{0.032t}

According to the problem,

5000e^{0.035t}=5250e^{0.032t}

\Rightarrow \frac{e^{0.035t}}{e^{0.032t}}=\frac{5250}{5000}

\Rightarrow e^{0.035t-0.032t}=\frac{21}{20}

\Rightarrow e^{0.003t}=\frac{21}{20}

Taking ln both sides

\Rightarrow lne^{0.003t}=ln(\frac{21}{20})

\Rightarrow 0.003t}=ln(\frac{21}{20})

\Rightarrow t}=\frac{ln(\frac{21}{20})}{0.003}

\Rightarrow t= 16.26

Therefore after 16.26 unit of time, both accounts have same balance.

The account balance on that time is

P(16.26)=5000e^{0.035\times 16.26}

              =$8,834.43

The both account have $8,834.43.

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Answer:

c. $45,000 liability

Explanation:

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= $62,000

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= $57,000

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Is the customer always right?" a. Company policy and rules always should be followed regardless of what the customer may need or
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3 years ago
Ann hires a nanny to watch her two children while she works at a local hospital. She pays the 19-year-old nanny $170 per week fo
aksik [14]

Answer:

Nanny's Portion of Social Security is $442.68  

Ann's Portion of Social Security Tax is $442.68

Nanny's Portion of Medicare Tax is $103.53  

Ann's Portion of Medicare Tax is $103.53

Explanation:

As explained by the Internal Revenue Service (IRS) under "Topic No. 751 Social Security and Medicare Withholding Rates", the social security tax rate are 6.2 percent for the employer and 6.2 percent for the employee, while the Medicare rate for employee is 1.45 percent and it is also 1.45 percent for the employer. In addition, the wage base limit for 2020 social security tax is $137,700.

Base on the above, we proceed as follows:

Step 2: Calculation total salary of nanny

Total salary of nanny = weekly rate × number of weeks worked

                                   = $170 × 42

                                   = $7,140

Step 2: Calculation of social security tax

Since the nanny's salary is below the wage base limit of $137,700, the tax rates are applied to the actual salary of $7,140 as follows:

Nanny's Portion of Social Security Tax = $7,140 × 6.2% = $442.68  

Ann's Portion of Social Security Tax = $7,140 × 6.2% = $442.68

Step 3: Calculation of Medicare tax

Since there is no wage base limit for Medicare tax, the tax rates are applied to the actual salary of $7,140 as follows:

Nanny's Portion of Medicare Tax = $7,140 × 1.45% = $103.53  

Ann's Portion of Medicare Tax = $7,140 × 1.45% = $103.53

6 0
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