Answered

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13. How much money will 8820 Vield in investa
+ 5%. for 3 years and compounded
continuosly and semiannually and determine
which eams more?

Sagot :

sqdancefan

9514 1404 393

Answer:

  • 10,247.38 from continuous compounding
  • 10,228.50 from semiannual compounding
  • continuous compounding earns more

Step-by-step explanation:

The formula for the account balance from continuously compounded interest at annual rate r for t years is ...

  A = Pe^(rt) . . . . P = principal invested

  A = 8820e^(0.05·3) ≈ 10,247.38 . . . continuous compounding

__

The formula for the account balance from interest compounded semiannually at annual rate r for t years is ...

  A = P(1 +r/2)^(2t)

  A = 8820(1 +.05/2)^(2·3) ≈ 10,228.50 . . . semiannual compounding

Continuous compounding earns more.

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