Question

Suppose that money is deposited daily into a savings account at an annual rate of $19,000. If the account pays 5,5​% interest compounded​ continuously, estimate the balance in the account at the end of 6 years.

Answer 1

Answer: $26,248.39

Explanation: the formula for calculating continuous compounding is

P x e^(rate)(time)

P=Principal

R=Rate

T= Time

therefor the savings of $19,000 at the rate of 5.5% for 6 years is calculated thus:

=$19,000 x e^(0.055)(6)

=$19,000 x e^(0.33)

=$26,248.39