SOLUTION: a person invests $310 in an account that pays 8%. how do I find the balance after 10 years?
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Question 1010132: a person invests $310 in an account that pays 8%. how do I find the balance after 10 years?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
if you assume compound interest where the interest is compounded annually, then the investment after 10 years will be 310 * (1.08)^10 = 669.27.
if you assume simple interest, then the investment after 10 years will be 310 + 310 * .08 * 10 = 558.
if you assume compound interest where the interest is compounded monthly, then the investment after 10 years will be 310 * (1 + .08/12)^10*12 = 310 * (1.006666666...)^120 = 688.09
if you assume continuous compounding of interest, then the investment after 10 years will be 310 * e^(.08*10) = 689.92.
in other words, you need to understand how the interest is handled before determing what the value will be after 10 years.
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