document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=388400>Question 388400</A>: <I><SPAN STYLE=\"word-break: break-all;\"> 4.  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?  You can use a scientific calculator or the =Exp() function in Microsoft Excel.  If you are crafty you can also find web pages that will do the calculations for you.  Regardless, show your steps and your work.\r<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 #274708 by </B><A HREF=/tutors/aboutme.mpl?userid=lwsshak3><B>lwsshak3(11628)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=lwsshak3><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/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=274708\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> 4a. Use the compound interest formula to solve this problem. The formula will give the value(A) of the principal(P) after 5 years. The difference between A & B is the amount of interest accumulated over 5 years.\r<BR>\n" );
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document.write( "A=760000(1+.05)^5=969973.99<BR>\n" );
document.write( "969973.99-760000=209973.99<BR>\n" );
document.write( "ans: interest accumulated over 5 years with regular compounding is $209973.99\r<BR>\n" );
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document.write( "4b. Use the continuous compounding formula to solve this problem.<BR>\n" );
document.write( "A=Pe^rt<BR>\n" );
document.write( "Using a scientific calculator, A=760000*e^(.05*5)=<BR>\n" );
document.write( "=760000*e^.25=975859.32<BR>\n" );
document.write( "975859.32-760000=215859.32<BR>\n" );
document.write( "ans: interest earned over 5 years with continuous compounding is $215859.32 </SPAN>\n" );
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