solve. you invest $2000 in a bank account for 5 yrs at an annual interest rate of 5%.
how much will your account be worth after 5yrs if it is compunded four times a year, to the nearest $0.01?
how much more will your account be worth after five years if it is compunded continuously?

Question

solve. you invest $2000 in a bank account for 5 yrs at an annual interest rate of 5%. 
how much will your account be worth after 5yrs if it is compunded four times a year, to the nearest $0.01?
how much more will your account be worth after five years if it is compunded continuously?

anonymous · Answer

just multiply it by 0.05 for each year.

anonymous · Answer

2000 times 0.05 = x

anonymous · Answer

x times 0.05 = y ... etc until you get to the five years.

anonymous · Answer

1.05, my bad.

anonymous · Answer

2000+1.05x=y for part 1

anonymous · Answer

For the first question:
A=$2000 (1+(.05)/4)^4=$2000 (1.0125)^4=$2102.89
For the second question:
A=$2000e^(rate*time)=$2000e^(.05*5)=$2568.05

anonymous · Answer

Cristiano and Johnny are both painfully mistaken.

anonymous · Answer

Lol, you're right. I've not done this in a while.