For Exercises 61-70, use the model A = P e r t or A = P ( 1 + r n ) r t , where A is the future value of P dollars invested at interest rate r compounded continuously or n times per year for t years. (See Example 11) If $4000 is put aside in a money market account with interest compounded continuously at 2.2%, find the time required for the account to earn $1000. Round to the nearest month.
For Exercises 61-70, use the model A = P e r t or A = P ( 1 + r n ) r t , where A is the future value of P dollars invested at interest rate r compounded continuously or n times per year for t years. (See Example 11) If $4000 is put aside in a money market account with interest compounded continuously at 2.2%, find the time required for the account to earn $1000. Round to the nearest month.
Solution Summary: The author calculates the time required for an account to earn 1000 in a money market account with interest compounded continuously.
For Exercises 61-70, use the model
A
=
P
e
r
t
or
A
=
P
(
1
+
r
n
)
r
t
, where A is the future value of P dollars invested at interest rate r compounded continuously or n times per year for t years. (See Example 11)
If $4000 is put aside in a money market account with interest compounded continuously at 2.2%, find the time required for the account to earn $1000. Round to the nearest month.
Jamal wants to save $48,000 for a down payment on a home. How much will he need to invest in an
account with 11.8% APR, compounding daily, in order to reach his goal in 10 years? Round to the
nearest dollar.
r
nt
Use the compound interest formula, A (t) = P(1 + 1)".
An account is opened with an intial deposit of $7,500 and earns 3.8% interest compounded semi-
annually. Round all answers to the nearest dollar.
a. What will the account be worth in 10 years? $
b. What if the interest were compounding monthly? $
c. What if the interest were compounded daily (assume 365 days in a year)? $
Kyoko has $10,000 that she wants to invest. Her bank has several accounts to choose from. Her goal is
to have $15,000 by the time she finishes graduate school in 7 years. To the nearest hundredth of a
percent, what should her minimum annual interest rate be in order to reach her goal assuming they
compound daily? (Hint: solve the compound interest formula for the intrerest rate. Also, assume there
are 365 days in a year)
%
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