Amaia0913
Answered

Looking for reliable answers? Westonci.ca is the ultimate Q&A platform where experts share their knowledge on various topics. Discover detailed solutions to your questions from a wide network of experts on our comprehensive Q&A platform. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

Aiden invested $98,000 in an account paying an interest rate of 2 3/8% compounded
continuously. Autumn invested $98,000 in an account paying an interest rate of 2 3/4%
compounded quarterly. After 11 years, how much more money would Autumn have in
her account than Aiden, to the nearest dollar?

Sagot :

Answer:

Aiden will have $17878 more than autumn

Step-by-step explanation:

For Aiden;

Formula for continuous compounding is;

FV = Pe^(rt)

P = 98000

r = 2⅜% = 0.02375

t = 11

Thus;

FV = 98000 × e^(0.02375 × 11)

FV = 127258.1218

For Autumn;

Formula for regular compounding;

FV = PV(1 + (r/n))^(nt)

Where;

PV is present value = 98000

r is rate = 2¾% = 0.0275

n is number of times amount is compounding = quarterly = 4

t is time in years = 11

Thus;

FV = 98000 + (1 + (0.0275/4))^(4 × 11)

FV = 98001.3518

Difference in their compounded amounts after 11 years is;

127258.1218 - 98001.3518 = 29256.77 ≈ $17878

Thanks for stopping by. We are committed to providing the best answers for all your questions. See you again soon. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.