Question 245163: John deposits 10000 in a college trust fund in which i=6.4% compounded quarterly. How much $ would be in the account after 18 yrs.
#2 In an account which pays 6.5% compounded continuosly, how much $ would need to be deposited in order to rach 50000 in 15 yrs?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! John deposits 10000 in a college trust fund in which i=6.4% compounded quarterly. How much $ would be in the account after 18 yrs.
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A(t) = P(1+(r/n))^(nt)
A(18) = 10,000(1+(0.064/4))^(4*18)
A(18) = 10,000(1+0.016)^72
A(18) = 10,000*3.136
A(18) = $31,360
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#2 In an account which pays 6.5% compounded continuosly, how much $ would need to be deposited in order to rach 50000 in 15 yrs?
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A(t) = Pe^(rt)
50,000 = Pe^(0.065*15)
50,000 = P(2.651)
P = $18,859.62
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Cheers,
Stan H.
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