Question

Suppose $24,000 is deposited into an account paying 7.25% interest, which is compounded continuously.

How much money will be in the account after ten years if no withdrawals or additional deposits are made?


$49,553.54


$48,326.40


$47,897.10


$46,414.20

Answer 1

$49,553.54

Step-by-step explanation:

`\sf Continuously \ compound \ interest : {A = P e^(rt)`

`[\sf where \ A \ is \ final \ amount, \ P \ is \ principal \ amount, \ r \ is \ interest \ rate, \ n \ is \ years]`

Here given following:

• principal amount (P) = $24,000

• rate of interest (r) = 7.25%

• years (t) = 10 years

Inserting these values in formula:

`\rightarrow {A = 24000e^(7.25\% (10))`

simplify following

`\rightarrow {A = 49553.54`