If a payment $P is made every year into an account that attracts a fixed interest rate of r % per annum compounded continuously pans the account is closed t years later the balance due will be:
where e is eulers number
a.) find the balance due after 10 years if 2000 dollars is invested each year and the interest rate is fixed at 10% per annum compounded continuously
b. ) find the number if years the scheme must run if an investor wants to invest 3000 dollars per year and close the account whenthe balance reaches 154000 dollars, assuming a constant interest rate of 8 percent per year compounded continuosly
If it is incorrect,we will have to work out,
$2000 is invested each year, so P = 2000.
r is the interest rate, which is given as 10%. Thus, r = 10
We need to find the balance due after 10 years, so t = 10.
Hence, the balance due will be
r is the interest rate, which is given as 8%. Thus, r = 8
We need to find the balance =15400