Question

How much more would be in

an account that has interest
compounded continuously
rather than annually if the
initial deposit is $500 and the
yearly interest rate is 7% for
10 years?

Answer 1

Answer: $1006.88

Explanation:

A = (1+r/n)^nt

Answer 2

Answer: $23.3

Explanation:

Compounded Continuously:

F=500e^0.07*10 = $1006.88

Compounded Annually:

F=500(1+0.07/1)^1*10 = $983.58

1006.88 - 983.58 = 23.3