# Calc

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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 -

compound interest formula is:

FV=PV(1+(r/n))^(nT)

As n approaches infinity, this formula becomes:

FV=PV*e^(rt)

for the 1st \$1000 invested:
FV=1000*e^(.07*20)

for the 2nd \$1000 invested:
FV=1000*e^(.07*19)

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 -

a.) \$43,645.71

b.) just do 1000*20 =20,000

c.) a-b (43,645.71-20,000=23645.71)

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