Question

Find the balance earned on an account that has $60,000 deposited for 6 years at 1.125% interest compounded continuously? Please help

Answer 1

The balance of the account is $64,190.

Explanation:

The amount of money after t years of continous compounding is given by the following equation:

`P(t) = P(0)e^(rt)`

In which P(0) is the initial deposit and r is the interest rate, as a decimal.

$60,000 deposited for 6 years at 1.125% interest compounded continuously.

This means that
`P = 60000, r = 0.01125, t = 6`

So

`P(6) = 60000e^(0.01125*6) = 64190`

The balance of the account is $64,190.