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$\$ 1250$ is deposited into an account for 10 years. Determine the accumulation if interest is $5.25 \%$ compounded (a) monthly, (b) daily, (c) continuously.

(a) 2110.66(b) 2112.99(c) 2113.07

Algebra

Chapter 4

Exponential and Logarithmic Functions

Section 3

The Number $e$

Harvey Mudd College

Baylor University

University of Michigan - Ann Arbor

Lectures

03:24

How much should be deposit…

03:06

$\$ 4750 dollars is deposi…

03:08

$\$ 500 dollars is deposit…

02:24

$\$ 1475 dollars is depos…

03:53

Compound Interest If $\$ 5…

03:00

01:13

Compound Interest A deposi…

00:50

Compound Interest If 500 d…

04:05

If $\$ 12,500$ is invested…

So the theme of this problem is understanding the compound interest formula, which looks like this versus the compounding continuously, which is what's called the performance E to the RT power. Eso in part aims gonna jump into it. We have $1250 to go into the account, making 5.25% interest. So that's 0.5 to 5 and we're compounding monthly. Well, there's 12 months in a year, so we replaced 12 and for those two ends, and we want this in the account for 10 years. And just so you know, some calculators, you have to put that in parentheses, and that's going to give me my answer for monthly. So type that in right here. Me clicking away on you get an answer of 2000 $110 makes sense here, almost doubling in 10 years in 66 cents. So I'll circle that. That's for monthly eso as they move on to Part B. Pretty much all of the information is the same, except we're going to move over to daily. Well, I'm just going to say that there's 365 days in the year. It's pretty accurate. 365 times. 10. Notice that the only thing that's different is I'm changing the 12, 2, 365. Uh, not too much of a difference, but this is going to give me my answer. That's daily. I'm It is 21 12, 99. So a few dollars more, you know, probably probably worth it. And then, in part C, we're doing compound and continuously or using the perform below, which is that you're starting at 12 50 still, but now it's e to the 500.525 still times 10. But just like before some calculators, you should put that in parentheses or know what 100.525 times 10 is so as you type that and you can answer of 21 13 oh seven. So you get eight cents more over the course of 10 years if you are compounding continuously instead of daily. I meant to circle these answers in green. Anyway, there's a B C

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