Question

a philanthropist deposits 2,000$, in a trust fund that pays 6.0%interest , compunded continuously. The balance given to the college from which the has earned interest for 20 years. How much will the college receive? round to the nearest tenth

Answer 1

$6414

Explanation:

Step one

given

Principal=$2,000

rate= 6%= 0.06

Time= 20 years

Required

The final amount

Step two:

The compound interest formula is

A= P(1+r)^t

substituting we have

`A=2000(1+0.06)^2^0\\\\ A= 2000(1.06)^2^0\\\\ A=2000*3.207\\\\A=6414`

The amount given to the college is $6414