Question

A saving account balance is compounded continuously. If the balance doubles every 34 years and the current balance is $1,348, what will the balance be 8 years from now?

Answer 1

To find the balance in 8 years, we can use the formula for continuous compound interest: A = P * e^(rt). In this case, the balance doubles every 34 years, which means the interest rate is approximately 2.9412%. Plugging in the values, the balance in 8 years will be $1573.26.

Step-by-step explanation:

To find the balance in 8 years, we can use the formula for continuous compound interest:

A = P * e^(rt)

Where:

• A is the final balance
• P is the initial balance
• r is the interest rate
• t is the time in years
• e is a mathematical constant approximately equal to 2.71828

In this case, the balance doubles every 34 years, which means the interest rate is 100%/34 or approximately 2.9412%.

Let's plug in the values:

A = 1348 * e^(0.029412 * 8) = $1573.26

So the balance in 8 years will be $1573.26.