Chapter 10: Q. 117 (page 1020)

Rochelle deposits $$ 5000$ in an IRA. What will be the value of her investment in $25$ years if the investment is earning $8 %$ per year and is compounded continuously?

Short Answer

Expert verified

The value of investment after $10$ years when compounded continuously is, $$ 36945.28$ .

Step by step solution

Step 1 The formula for the compounded continuously is,

$A = P e^{r t}$ .

where $A$ is the new balance.

$P$ is the principal.

$r$ is the interest rate.

$t$ is the number of years.

Step 2 Substitute P=5000,r=0.08,t=25 in the formula.

$A = 5000 {(e)}^{0.08.25} = 5000 {(e)}^{2} \approx 36945.28 .$

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Rochelle deposits $$ 5000$ in an IRA. What will be the value of her investment in $25$ years if the investment is earning $8 %$ per year and is compounded continuously?

Short Answer

Step by step solution

Step 1 The formula for the compounded continuously is,

Step 2 Substitute P=5000,r=0.08,t=25 in the formula.

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Rochelle deposits $5000in an IRA. What will be the value of her investment in 25years if the investment is earning 8%per year and is compounded continuously?

Short Answer

Step by step solution

Step 1 The formula for the compounded continuously is,

Step 2 Substitute P=5000,r=0.08,t=25 in the formula.

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Math Textbooks

Geometry

Calculus

Applied Mathematics

Probability and Statistics

Theoretical and Mathematical Physics

Statistics

Study anywhere. Anytime. Across all devices.

Rochelle deposits $$ 5000$ in an IRA. What will be the value of her investment in $25$ years if the investment is earning $8 %$ per year and is compounded continuously?