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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

 Jun 16, 2014

Best Answer 

 #1
avatar+98091 
+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.....!!!!!

 

 Jun 16, 2014
 #1
avatar+98091 
+5
Best Answer

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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