Question

David invested $89,000 in an account paying an interest rate of 3.1% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest ten dollars, would be in the account after 15 years?

Answer 1

To have $10,000 in ten years with a 10% interest rate compounded annually, you would need to put approximately $3,861.80 into the bank account.

Step-by-step explanation:

To find the amount of money you need to put into a bank account to have $10,000 after 10 years with an interest rate of 10% compounded annually, you can use the formula for compound interest: A = P(1 + r/n)^(nt)

Where:
A = the amount of money you will have after the specified time period
P = the principal amount (the initial investment)
r = the annual interest rate (expressed as a decimal)
n = the number of times the interest is compounded per year
t = the number of years

Plugging in the values for this question, we get:
$10,000 = P(1 + 0.1/1)^(1 * 10)

Now we can solve for P:
$10,000 = P(1.1)^10
P = $10,000 / (1.1)^10

Using a calculator, we find that P is approximately $3,861.80