document.write( "Question 887913: Which is the better deal, $10,000 invested at 5%, compounded yearly, for 20 years, or $5,000 invested at 10%, compounded continuously, for 20 years? \n" ); document.write( "
Algebra.Com's Answer #536944 by lwsshak3(11628)\"\" \"About 
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Which is the better deal, $10,000 invested at 5%, compounded yearly, for 20 years, or $5,000 invested at 10%, compounded continuously, for 20 years?
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\n" ); document.write( "$10,000 invested at 5%, compounded yearly, for 20 years
\n" ); document.write( "compound interest formula: A=P(1+i)^n, P=initial investment, i=interest rate per compounding period, n=number of periods, A=amt after n-periods
\n" ); document.write( "For given problem:
\n" ); document.write( "P=$10000
\n" ); document.write( "i=.05
\n" ); document.write( "n=20
\n" ); document.write( "A=10000(1+.05)^20
\n" ); document.write( "A=10000(1.05)^20≈$26,533
\n" ); document.write( "..
\n" ); document.write( "$5,000 invested at 10%, compounded continuously, for 20 years
\n" ); document.write( "Formula for continuous compounding: A=Pe^rt, P=initial investment, r=interest rate, t=number of years, A=amt after t-years
\n" ); document.write( "For given problem:
\n" ); document.write( "P=$5000
\n" ); document.write( "r=0.10
\n" ); document.write( "t=20
\n" ); document.write( "A=amt after t-years
\n" ); document.write( "A=5000*e^.10*20
\n" ); document.write( "A=5000*e^2
\n" ); document.write( "A≈$36,945
\n" ); document.write( "...
\n" ); document.write( "$5000 investment compounded continuously is the better deal \n" ); document.write( "
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