Question

Haywood Bank is offering 1.8 percent compounded daily on its savings accounts. You deposit $8,000 today. How much will you have in your account 11 years from now? (please show work i am confused)

Answer 1

The formula for finding the future value of a present value invested at a continuously compounding interest rate r for t years is: FV = PV · e ^rt

where PV= present value

e= 2.71828

r= rate per year

t= time period

Applying this formula, you can determine what the future value of $8000 invested for 11 years at a continuously compounding rate of 1.8% is.

FV =? ,

PV = 8000,

r = 0.018,(1.8%/100)

t = 11

FV = PV * e^ rt

= $8000* e^ 0.018*11 =

= $8000*2.71828^ 0.018 * 11

=$8000 * 2.71828^0.198

=$8000* 1.21896223

=$9751.69784

After 11 years the amount will be $9751.69784