Posted by James on Tuesday, April 8, 2008 at 8:22pm.
A person deposits money into a retirement account, which pays 7% interest compounded continuously, at a rate of $1000 per year for 20 years. Calculate:
a. The balance of the account at the end of 20 years
b. the amount of money actually deposited into the account
c. the interest earned during the 20 years.
I think i know that for part a you use the integral to find the future value maybe, but i have no idea how to do b or c
Calc - FredR, Wednesday, April 9, 2008 at 1:00am
compound interest formula is:
As n approaches infinity, this formula becomes:
for the 1st $1000 invested:
for the 2nd $1000 invested:
and so on for 20 years. The sum total of future values minus $20,000 deposited is the interest earned in the 20 years.
Calc - Kati, Thursday, February 13, 2014 at 12:07am
b.) just do 1000*20 =20,000
c.) a-b (43,645.71-20,000=23645.71)
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