Answer:
The balance in this account at the end of the 10-year period is 310000
Step-by-step explanation:
Solution
Given that:
Now, Recall that,
Time period is = 10 yrs = 12*10 = 120 months
Interest = 10%
= 10%/12 = 0.8333% per month continuously compounded .
Thus,
The rate effective per month = e^r - 1 = e^0.0083333 - 1 = 0.00836815
so,
The month per = 1500
The value of future deposit = 1500 * (F/A,0.836815%,120)
= 1500 * [((1 + 0.00836815)^120 - 1)/ 0.00836815]
= 1500 * [((1.00836815)^120 - 1)/ 0.00836815]
= 1500 * 205.3359
= 308003.89
which is also = 310000 (nearest value)