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If 8000 dollars is invested in a bank account at an interest rate of 10 per cent per year, find the amount in the bank after 11 years if interest is compounded annually ____

Find the amount in the bank after 11 years if interest is compounded quaterly ____
Find the amount in the bank after 11 years if interest is compounded monthly ____
Finally, find the amount in the bank after 11 years if interest is compounded continuously

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3 answers
  1. I will do the 2nd part

    i = .10/4 = .025
    n = 11*4 = 44
    amount = 8000(1.025)^44 = 23710.46

    do #1, and #3 the same way

    #4:
    amount = 8000(e^(.1t))
    = 8000(e^(.10*11) ) = 24033.33

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  2. i don't understand how you set up the equation. what formula do you use for #1 & #3? please and thank you :)

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  3. Amount = principal(1 + i)^n
    where i is the periodic interest rate as a decimal
    and n is the number of interest periods.

    in my example, the rate was 10% , compounded quarterly, so I found
    i = .10/4 = .025

    and in 11 years, for quarterly compounding, there are 11*4 or 44 periods, so n = 44

    in #1, i=10, n=11
    amount = 8000(1.10)^11 = ...

    in #3, i = .10/12 = .00833333
    n = 11*12 = 132

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