In
18501850,
a person sold a house to a lady for
$2828.
If the lady had put the
$2828
into a bank account paying
44%
interest, how much would the investment have been worth in the year
20102010
if interest were compounded in the following ways?
a. monthly b. continuously
+37170 I will say it is 160 years EDITED: CHANGED YEARS FROM 170 to 160
monthly interest is 4 /12 = .3333 % = .003333 28 (1.00333)(160 * 12) = 16672.20
continuously = 28 ert = 16851.66
2010 - 1850 = 160 years
N=160*12; R=0.04/12;PV=28; P =0; FV=PV*(1 + R)^N; print"FV =$",FV
N=160; R=0.04081077;PV=28; P =0; FV=PV*(1 + R)^N; print"FV =$",FV
FV =$ 16673.26 compounded monthly
FV =$ 16851.66 compounded continuously
Note: I took the purchase price of the house as $28 and not $2828 as you have it.
