SOLUTION: Ok, this is my last one that I need help with tonight, again word problems are killing me. If I invest $1000 on May 18th in a savings account that pays 10% interest compounded e

Algebra ->  Finance -> SOLUTION: Ok, this is my last one that I need help with tonight, again word problems are killing me. If I invest $1000 on May 18th in a savings account that pays 10% interest compounded e      Log On


   

Question 296144: Ok, this is my last one that I need help with tonight, again word problems are killing me.
If I invest $1000 on May 18th in a savings account that pays 10% interest compounded every month, and I invest $1000 (on the same day) in an account which pays 10% interest that is compounded continuously:
Which will be worth more in one year?
By how much?
joe
Answer by mananth(16946) About Me  (Show Source):
You can put this solution on YOUR website!
a=P(1+r/q)^nq compounded monthly
a= 1000(1+10/12)^1*12
a=1000(12.1/12)^12
=1104.71

for continuous caculation of CI
a=p*e^rt
a=1000*e^0.1*1
=1105.17