Question

Use the formula for continuous compounding to compute the balance in the account find the APY for the account. $4,000 deposit in an account with an APR of 8%.   (Round to the nearest cent as needed.)

Answer 1

Given:

​$4,000 deposit in an account with an APR of ​8%.

Required:

We need to find APY with APR 8%

so

$x=8\%$

Explanation:

Here we find for 1 year

take n=1 in

$4000*e^{1*\frac{8}{100}}=4333.15$

Now to find ARP

$\begin{gathered} 4000(1+\frac{x}{100})=4333.15 \\ \\ 1+\frac{x}{100}=1.08328 \\ \\ \frac{x}{100}=0.08328 \\ \\ x=8.328 \\ x\approx8.33\% \end{gathered}$

Final answer:

$4333.15

8.33%