an initial deposit of $30,000 grows at an annual rate of 8% for 20 years.?

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Compare the final balances resulting from continuous compounding and annual compounding

2007-04-18 19:10:10 · 2 answers · asked by scoota 1 in Science & Mathematics ➔ Mathematics

Continuous: A = Pe^(rt) = 30,000 x e^(.08 x 20) = $148,590.97

Annual: A = P(1 + r)^t 30,000 x (1.08)^20 = $139,828.71

2007-04-18 19:18:36 · answer #1 · answered by dharmabum2 2 · 0⤊ 0⤋

30000(1.08)^20 = $139,828.71 [Annual compounding]
30000e^20*.08 = $148,590.97 =Continuous compounding]

2007-04-19 02:20:28 · answer #2 · answered by ironduke8159 7 · 0⤊ 0⤋