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One the day a child's birth, a parent deposite 30,000 in a trust fund that pays 5 percent interest, compounded continuously. Determine the balance in the account the child's 25 birhtday?

User Tinple
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2 Answers

5 votes

Answer: $104,710.29

Step-by-step explanation: hope it helps

User Ampersand
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6 votes

Answer:

$104,710.29

Explanation:

The amount is given by ...

A = Pe^(rt)

where P is the principal invested at annual rate r for t years. Filling in the numbers, we get ...

A = 30000e^(.05·25) = 30000e^1.25 ≈ 104,710.29

The balance will be about $104,710.29 on the child's 25th birthday.

User Max Gruzin
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