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

Guest Apr 4, 2020

edited by
Guest
Apr 4, 2020

#1**+1 **

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 e^{rt} = 16851.66

ElectricPavlov Apr 4, 2020

#2**0 **

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.

Guest Apr 4, 2020

edited by
Guest
Apr 4, 2020