Answered

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3. Ed computes the ending balance for a CD he is considering. The principal is $20,000, and the
interest rate is 2.39%, compounded continuously for 4years. He uses the formula B = pet and
substitutes directly on his calculator. Look at the keystrokes he entered: 20, 000e^(.0239) (4) He
presses ENTER and sees this display: 20000e^(.0239) (4) = 81935.03152 Ed's knowledge of
compound interest leads him to believe that this answer is extremely unreasonable. To turn $20,000
into almost $82,000 in just 4years at 2.39% interest seems incorrect to him. a. Find the correct
ending balance, to the nearest cent. b. Explain what part of Ed's keystroke sequence is incorrect.

Sagot :

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