SOLUTION: Dutch settlers purchased Manhattan Island from the Manhattan Indians for $24. If the Indians had deposited that money into a bank at 5% intrenst compunded quarteyly what would the

Question 113524: Dutch settlers purchased Manhattan Island from the Manhattan Indians for $24. If the Indians had deposited that money into a bank at 5% intrenst compunded quarteyly what would the account be worth today?
do th e problem again assuming the money was deposited continuously for the same amount of time.
I have no idea what to do for this probelem. I know that for the first part I have to use the compund intrest formula which is A=P(1+r/n)^nt, and for the second part I have to use A=Pe^rt. From here I'm lost please help.
Thanks
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Dutch settlers purchased Manhattan Island from the Manhattan Indians for $24. If the Indians had deposited that money into a bank at 5% intrenst compunded quarteyly what would the account be worth today?
--------
You should have been told when that purchase was made so you could determine
the value of "t". Let's assume the purchase was made in 1650; then t =
2007-1650 = 357 years.
A(357) = 24(1+0.05/4)^(4*357) = 24*1.0125^1428 = 24*50594759.31=$1,214,274,223
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do th e problem again assuming the money was compoujnded continuously for the same amount of time.
A(t) = 24^e^(0.05*357) = 24*56514059.17=1,356,337,420
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Cheers,
Stan H.

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