Suppose that you have 30000 to invest Determine the total am

Suppose that you have $30,000 to invest. Determine the total amount in the account at end of 10 years for the all of the following options: 1) Simple Interest of 5% 2) Interest of 5% compounded monthly (round final answer to nearest cent) 3) Interest of 5% compounded continuously (round final answer to nearest cent)

Solution

Given data

P = $30000

T = 10 yr

(1) Simple interest = R*R*T/100

= (30000*5*10)/100

= $ 15000

(2) Interest of 5% compounded monthly

Here n = 12 bcoz monthaly

  A = P(1+r/n)^nt

Put the values A = 30000(1+5/12)^(12*10)

A = $49410.28

(3) Interest of 5% compounded continuously

hera n =1 bcoz yearly

same above formula

A = P(1+r/n)^nt

Put the values A = 30000(1+5/1)^(1*10)

A = $48866.84

Answer