Homework Help: compounded continously

Posted by Anonymous on Monday, April 11, 2011 at 10:39am.

Wnat to have $60,000 in an account after 40 years. How much needs to be deposited inthe APR is 16.3% compounded daily?

compounded continously - Henry, Tuesday, April 12, 2011 at 8:51pm
Compounded Continuously

Pt = Po*e^rt = $60000,

r = (16.3%/365) / 100% = 0.0004466 = Daily % rate expressed as a decimal.

t = 40yrs * 365days/yr = 14600 days.

rt = 0.0004466 * 14600 = 6.52.

Po * e^6.52 = 60000,
Po = 60000 / e^6.52 = $88.42 = initial deposit.

ComPounded Daily

Pt = Po*(1+r)^n = $60000,
r = (16.3%/365) / 100% = 0.0004466 =
daily % rate express as a decimal.

n = 365comp./yr * 40yrs = 14600 comp.
periods.

Po*(1.0004466)^14600 = 60000,
Po = 60000 / (1.0004466)^14600 = $88.52 = initial deposit.

Related Questions

compounded continously - A saving account earns 4.3% compounded continously. How...
Math - How much money has to be invested at 4.3% compounded continously to have...
Math - Please check my work, thank you If $7,800 is deposited into an account ...
Math - Lee Holmes deposited $15,000 in a new savings account at 9% interest ...
MATH HOMEWORK HELP PLEASE ANSWER - Lee Holmes deposited $15,000 in a new savings...
college math - Cindy deposited $1,000 in an account that pays 12% interest ...
math - One thousand dollars is deposited in a savings account at 6% interest ...
math - If $3,000.00 is deposited into an account paying 3% interest compounded ...
math - If $3,000.00 is deposited into an account paying 3% interest compounded ...
Math - If $3,000.00 is deposited into an account paying 3% interest compounded ...

For Further Reading

First Name:
School Subject:
Answer: