Question

Accumulated Amount of Money Flow  An investment is expected to yield a uniform continuous rate of money flow of $20,000 per year for 3 years. Find the accumulated amount at an interest rate of 4% compounded continuously.

Answer 1

Amount after 3 years will be $22496

Explanation:

We have given principal amount P = $20000

Rate of interest r = 4 %

Time period t = 3 years

We have to find the amount after 3 years

Amount is given by
`A=P(1+(r)/(100))^n`

So
`A=20000(1+(4)/(100))^3`

`A=20000* (1.04)^3=20000* 1.1248=22496`

So amount after 3 years will be $22496