Posted by **Brit** on Monday, August 22, 2011 at 11:42pm.

If 8000 dollars is invested in a bank account at an interest rate of 10 per cent per year, find the amount in the bank after 11 years if interest is compounded annually ____

Find the amount in the bank after 11 years if interest is compounded quaterly ____

Find the amount in the bank after 11 years if interest is compounded monthly ____

Finally, find the amount in the bank after 11 years if interest is compounded continuously

- Calculus :) -
**Reiny**, Tuesday, August 23, 2011 at 8:23am
I will do the 2nd part

i = .10/4 = .025

n = 11*4 = 44

amount = 8000(1.025)^44 = 23710.46

do #1, and #3 the same way

#4:

amount = 8000(e^(.1t))

= 8000(e^(.10*11) ) = 24033.33

- Calculus :) -
**Brit**, Tuesday, August 23, 2011 at 5:40pm
i dont understand how you set up the equation. what formula do you use for #1 & #3? please and thank you :)

- Calculus :) -
**Reiny**, Wednesday, August 24, 2011 at 7:56am
Amount = principal(1 + i)^n

where i is the periodic interest rate as a decimal

and n is the number of interest periods.

in my example, the rate was 10% , compounded quarterly, so I found

i = .10/4 = .025

and in 11 years, for quarterly compounding, there are 11*4 or 44 periods, so n = 44

in #1, i=10, n=11

amount = 8000(1.10)^11 = ...

in #3, i = .10/12 = .00833333

n = 11*12 = 132

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