Question

Calculate the amount of money in a bank account if you deposit $4,000 for 15 years and

you earn an interest rate of 4.7% that is compounded continuously.
(Do not include the dollar sign in your answer & round to the nearest penny)

Answer 1

8095.39

Explanation:

You want the amount of money in an account after 15 years if $4000 is deposited, and interest of 4.7% is compounded continuously.

Continuous compounding

The value of an account subject to continuous compounding of interest is ...

A = Pe^(rt)

where P is the initial deposit, r is the annual interest rate, and t is the number of years.

We have ...

A = 4000·e^(0.047·15) ≈ 8095.39

The amount in the account is $8095.39 after 15 years.

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