Question

Use the formula for continuous compounding to compute the balance in the account after 20 years. Also, find the APY for the account. $4,000 deposit in an account with an APR of 8%.The balance in the account after 20 year is approximately and the APR  (Round to the nearest cent as needed.)

Answer 1

Given:

`\begin{gathered} P=4000 \\ r=8\% \\ t=20 \end{gathered}`

Required:

To find the balance amount after 20 years.

Step-by-step explanation:

The formula is

`\begin{gathered} A=Pe^(rt) \\ \\ =4000e^(0.08*20) \\ \\ =4000(2.71828)^(1.6) \\ \\ =19812.13 \end{gathered}`

The total amount accrued, principal plus interest, with compound interest on a principal of $4,000.00 at a rate of 8% per year compounded continuously over 20 years is $19,812.13.

Final Answer:

The balance amount after 20 year is $19,812.13