# Calc

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

1. 👍 0
2. 👎 0
3. 👁 155
1. 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.

1. 👍 0
2. 👎 0
posted by FredR
2. a.) \$43,645.71

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

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

1. 👍 0
2. 👎 0
posted by Kati

## Similar Questions

1. ### PRE-CALC

If you put \$2,000 in a savings account that pays 6% interest compounded continuously, how much money will you have in your account in 4 years? Assume you make no additional deposits or withdrawals

asked by Anonymous on December 29, 2014
2. ### Finite Math and Applied Calculus

Betty Sue sets up a retirement account. For the first 35 years, she deposits \$500 at the end of each month into an account with an annual interest rate of 3.6%, compounded monthly. Then, she stops making monthly payments and

asked by Chris on February 19, 2014
3. ### Math

At the end of each quarter, a 50-year-old woman puts \$3000 in a retirement account that pays 5% interest compounded quarterly. When she reaches 60, she withdraws the entire amount and places it in a mutual fund that pays 6.9%

asked by dana on November 7, 2010
4. ### geometry

A person deposits \$500.00 into a savings account and pays 5% annual interest that is compounded yearly. At the end of the 10 years how much money will be in the savings account ?

asked by Anonymous on December 5, 2011
5. ### math

a person deposits five hundred dollars in a savings account that pays 5% annual interest that is compounded yearly. At the end of ten years, how much money will be in the savings account?

asked by cynthia on February 18, 2013
6. ### math

To save for their retirement, a couple deposits \$4000 in an account that pays 5.9% annual interest compounded quarterly. What will be the value of their investment after 20 yr?

asked by Anonymous on September 19, 2010
7. ### math

To save for their retirement, a couple deposits \$4000 in an account that pays 5.9% annual interest compounded quarterly. What will be the value of their investment after 20 yr?

asked by Anonymous on June 22, 2010
8. ### PRE-CALCULUS

. Sam won \$150,000 in the Michigan lottery and decides to invest the money for retirement in 20 years. Find the accumulated value for Sam’s retirement for each of his options: (a) a certificate of deposit paying 5.4% compounded

asked by ROSE on November 18, 2016
9. ### Calculus 2

I cannot figure this out for the life of me. Maybe I am overthinking it. Money is transferred into an account at the rate of R(t)=5000t(e^-0.6t) If the account pays 2% interest compounded continuously, how much will accumulate in

asked by Alexis on February 10, 2017
10. ### PreCal

A person deposits \$1000 in a bank account which pays 8% annual interest compounded continuously. Used formula A=Pe^in You get A=(1000)e^.08(1)=1000e^.08≈ 1000(1.08329) ≈ \$1,083.29 My question is how do you get 1.08329 from

asked by Terri on November 30, 2013

More Similar Questions