The amount received for continous compounding for 50 yrs
Let A represent the total Amount received
Let P represent the principle
Let r represent the rate of interest
Let t represent the time taken
Then for Compound Interest(C.I)
A= P[tex][1 + \fract {r^{n}}{100}]^{t}[/tex]
the formula given above is used when we have to calculate the amount for a small amount of time such as 5-10 yrs
When talking about continuous compounding, i.e. where compounding interest takes place directly for a long period of time then we use the formula:
A= P[tex]e^{rt}[/tex]
Given in Question:
P= $25,000
r=8%
t=50
Then using the formula for continuous compounding:
A= P[tex]e^{rt}[/tex]
A= 25000([tex]e^{(0.08)(50)}[/tex])
A = 25000 x [tex]e^{4}[/tex]
A = 25000 x 54.598
A = $1,364,953.7508
A≈ $1,364,953.751
Learn more about Compound Interest at:
brainly.com/question/25857212
#SPJ4
