Question

Jackson deposited $5,000 at 3.8% interest, compounded continuously, when he was 18 years old. How much will be in the account when he is 40 years old if he made no other deposits or withdrawals?

$19,000.19
$11,535.60
$10,691.38
$8,800.00

Answer 1

Answer:

$11535.60 will be in his account when he is 40 years old

Step-by-step explanation:

Jackson deposited $5,000 at 3.8% interest, compounded continuously, when he was 18 years old

Time period is from 18 years to 40 years

t= 40 - 18 = 22

For compounding continuously we use formula

$A= Pe^{rt}$

P = initial amount deposited = 5000

r= rate of interest = 3.8% = 0.038

t= time period = 22 years

now plug in all the values and find out A final amount

$A= 5000e^{0.038*22}$

$A= 5000e^{0.836}$

A= 11535.60