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# You deposit \$6,000 into an account that pays 5%. Find the account balance after 2 years if the interest is compounded: a) monthly b) continuously

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You deposit \$6,000 into an account that pays 5%. Find the account balance after 2 years if the interest is compounded: a) monthly b) continuously

Guest Jun 16, 2014

#1
+80992
+5

Compounded monthly =

6000(1 + .05/12)^(2*12)  ≈ \$6629.65

Continuous compounding =  Pert

6000e^(.05*2) ≈ \$6631.03

Note that continuous compounding doesn't differ much from monthly compunding.....!!!!!

CPhill  Jun 16, 2014
Sort:

#1
+80992
+5

Compounded monthly =

6000(1 + .05/12)^(2*12)  ≈ \$6629.65

Continuous compounding =  Pert

6000e^(.05*2) ≈ \$6631.03

Note that continuous compounding doesn't differ much from monthly compunding.....!!!!!

CPhill  Jun 16, 2014

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