Question

Gregory may choose between two accounts in which to invest $5000. Account A offers 2.3% annual interest compounded monthly. Account B offers continuous compound interest. Greg plans to leave his investment untouched (no further deposits and no withdrawals) for 10 years.


need help calculating account b's balance​

Answer 1

Answer:

see below

Step-by-step explanation:

principal = $5,000

interest rate = 2.3%

account A: compound monthly for 10 years

account B: compound continuously for 10 years

account A: compound monthly for 10 years

A = P (1 + r/12)^ r*t

 = $5,000 (1 + .023/12)^ 12(10)

= $6,291.6

account B: compound continuously for 10 years

FVn = PV * e^r*t

      = $5,000 * e ⁽⁰ ⁰²³ˣ¹⁰⁾

      = $6,293

Gregory may chose account B. (but the difference is only $1.40)

Answer 2

Gregory may choose account B.

Given that,

• Principal = $5,000 .
• The interest rate = 2.3% .
• Account A: compound monthly for 10 years .
• Account B: compound continuously for 10 years

Based on the above information, the calculation is as follows:

• For Account A

$A = P (1 + r\div 12)^ {r\times t} \\\\= 5,000 (1 + .023\div 12)^ {12(10)}$

= $6,291.6

• For account B

$FVn = PV \times e^{r\times t}\\\\ = 5,000 \times e^ {0.023\times 10}$

= $6,293

Therefore we can conclude that Gregory may choose account B.

Learn more: brainly.com/question/17429689