Amaia0913
Answered

Explore Westonci.ca, the premier Q&A site that helps you find precise answers to your questions, no matter the topic. Join our Q&A platform and get accurate answers to all your questions from professionals across multiple disciplines. Our platform offers a seamless experience for finding reliable answers from a network of knowledgeable professionals.

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

Visit us again for up-to-date and reliable answers. We're always ready to assist you with your informational needs. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.