SOLUTION: Bill invests $7000 in a savings account that compounds interest quarterly at an APR at 4.7%. Ted invests $7000 in a savings account that compounds interest continuously at an APR 4
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Question 1075874: Bill invests $7000 in a savings account that compounds interest quarterly at an APR at 4.7%. Ted invests $7000 in a savings account that compounds interest continuously at an APR 4.7%. Who will have the larger accumulated balance after 10 years?
I would really appreciate being walked through this problem, thank you! Answer by jorel1380(3719) (Show Source):
You can put this solution on YOUR website! $7000 at 4.7%, compounded quarterly equals:
7000 x (1+(.047/4)^(10x4)=7000 x 1.5956165143929241851680262678313=$11169.3156 at the end of 10 years.
$7000 at 4.7% compounded continuously equals:
(7000 x (e^(.047x10)))=11199.95935252152168768915032418, or $11199.95935 accumulated balance at the end of 10 years.
The continuously compounded account will have more money in it at the end. ☺☺☺☺
