College Algebra (10th Edition)

Published by Pearson
ISBN 10: 0321979478
ISBN 13: 978-0-32197-947-6

Chapter 6 - Section 6.7 - Financial Models - 6.7 Assess Your Understanding - Page 476: 51



Work Step by Step

The amount A after t years due to a principal P invested at an annual interest rate r, expressed as a decimal, compounded n times per year is $A=P\displaystyle \cdot(1+\frac{r}{n})^{nt}$ If compounding is continuous, $A=Pe^{rt}$ --- Will: $A=2000\displaystyle \left(1+\frac{0.09}{2}\right)^{(2)(20)}={{\$}} 11,632.73$ Henry: $A=2000e^{(0.085)(20)}={{\$}} 10,947.89$ After 20 years, Will has more than Henry.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.