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Find the amount of money that will be accumulated in a savings account if $4350

is invested at 6.0% for 22
years and the interest is compounded continuously.

1 Answer

3 votes

Answer:

the amount of money accumulated in the savings account after 22 years with continuous compounding is $16,329.21.

Explanation:

The formula for the amount of money accumulated in a savings account with continuous compounding is:

A = Pe^(rt)

where A is the amount of money accumulated, P is the principal (initial investment), e is the mathematical constant approximately equal to 2.71828, r is the annual interest rate expressed as a decimal, and t is the time in years.

Substituting the given values, we get:

A = 4350 * e^(0.06*22)

A = 4350 * e^(1.32)

A = 4350 * 3.7486

A = $16,329.21 (rounded to the nearest cent)

Therefore, the amount of money accumulated in the savings account after 22 years with continuous compounding is $16,329.21.

User Ben Bolker
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