00:01
In this question, someone invested $1 ,000 into account at the rate of 10%.
00:08
And in the first case, it's compounded monthly.
00:12
In the second case, it's compounded continuously.
00:16
And in each case, we are asked to find the value of the account after 10 years.
00:21
Now, the rate is 10 % means that the coefficient r equals to 0 .100 equals to 0 .1.
00:37
And when the account compounded monthly means that the formula we are going to use is a0 times 1 plus r over n to the power nt, where n is the number of month in a year.
00:58
When it's compounded monthly, n equals to 12, because there are 12 months in a year.
01:08
Therefore, the formula for the value of the account is 1000 times 1 plus 0 .1 divided by 12 to the power 12t.
01:26
And from this formula we can easily find a of 10 after 10 years.
01:33
A of 10 equals to 1000 times 1 plus 0 .1 or 12 raised to the 120th power...