document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=178353>Question 178353</A>: <I><SPAN STYLE=\"word-break: break-all;\"> You have $760,000 in your bank account.  The interest rate in your account is 5%.  Solve for the following:\r<BR>\n" );
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document.write( "a.  How much interest will you accumulate if interest is compounded  annually over the next five years?\r<BR>\n" );
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document.write( "b. How much interest will you earn in your account over the next five years with continuous compounding?<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #133374 by </B><A HREF=/tutors/aboutme.mpl?userid=EMStelley><B>EMStelley(208)</B></A><img src=\"/images/stars/stars-09.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=EMStelley><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=EMStelley><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=133374\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> For part a, you need the equation for compounding n times per year:<BR>\n" );
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document.write( "So here, P=760,000, r=0.05, n=1, and t=5.  So,<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=A=760000%281%2B%280.05%2F1%29%29%5E%281%2A5%29=969973.99 ALIGN=MIDDLE  ALT=\"A=760000%281%2B%280.05%2F1%29%29%5E%281%2A5%29=969973.99\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "So to know the interest, we just subtract: $969,973.99-$760,000=$209,973.99.\r<BR>\n" );
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document.write( "Now, for part b), the formula for continuous compounding is<BR>\n" );
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document.write( "So,<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=A=760000e%5E%280.05%2A5%29=975859.32 ALIGN=MIDDLE  ALT=\"A=760000e%5E%280.05%2A5%29=975859.32\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "So the interest is $975859.32-$760000=$215,859.32 </SPAN>\n" );
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