You open two savings accounts in your bank. In account AA you deposit $500 earning 7 % annual interest compounded monthly. In account BB you deposit $ 400 earning 8 % annual interest compounded continuously.

a. After 10 years, how much money is in each account?
b. After 50 years, how much money is in each account?

Can someone explain how to set up the equations?

Question

You open two savings accounts in your bank. In account AA you deposit $500 earning 7 % annual interest compounded monthly. In account BB you deposit $ 400 earning 8 % annual interest compounded continuously.

a. After 10 years, how much money is in each account?
b. After 50 years, how much money is in each account?

Can someone explain how to set up the equations?

djkaras · Answer

aa= 4200

djkaras · Answer

bb = 19200

anonymous · Answer

I just want to understand how to set up the equations...

djkaras · Answer

Multiply 500 bye 0.07 and multiply that bye 12 and then bye 10

djkaras · Answer

DO the same thing with bb

djkaras · Answer

Did this help??

anonymous · Answer

We aren't allowed to use calculators in our test so we just have to put the equation. Here are the starting equations I just don't understand why she set them up like this. A(t) = 500(1 + 0.07/12)12t and B(t) = 400e^(0.08t)

djkaras · Answer

Thats the complecated way

anonymous · Answer

idk thats how she wants us to solve it...

anonymous · Answer

I hate that method but she marks us off if we don't do it her way:/

djkaras · Answer

brb

djkaras · Answer

10 years aa = 4200
50 year aa = 21000

10 year bb = 3840
50 year bb = 19200

onlly stuff i know sorry.

anonymous · Answer

no problem:) I'll just wait for someone else to explain or ask a friend:)

djkaras · Answer

Fan me mabye?