Question

Sebastian invested $7,100 in an account paying an interest rate of 8 1 4 \% compounded monthly. Eva invested $7,100 in an account paying an interest rate of 8 1 2 \% compounded continuously After 5 years, how much more money would Eva have in her account than Sebastian, to the nearest dollar?

Answer 1

80

Explanation:

Answer 2

Given:

Sebastian :

Principal(invested)= $7,100

Rate of interest= 8.14% compounded monthly

Eva:

Principal(invested)= $7,100

Rate of interest= 8.12% compounded continuously

Explanation:

After 5 years,

In Sebastian case:

Amount= Principal*
`(1+R/100)^(t)`

Amount = 7100*
`(1+8.14/100)^(12*5)`

Amount= 7100*
`1.0814^(60)`

Amount=7100*109.4415

Amount= $777,034.43

In Eva case,

Amount= Principal*
`e^(Rt/100)`

Amount = 7100*
`e^(0.0812*12*5\\)`

Amount= 7100*130.5818

Amount= $927,130.92

Difference between their money=$927,130.92-777034.43

=$150,096.49

Eva has $150,096 more money than Sebastian.