Continuous Compounding Formulas (n → ∞)
To calculate Accrued Amount (Principal + interest) :
where P is the principal Amount and r- rate of interest and t the time .
The Bequest will be worth (after 15 years)
P = 21385.322, r = 4.8 % and t = 15 substituting into equation (1)
we get
for the CD, we need A= $ 43,934.92 in 15 years (@ 5.3% interest rate). we need to find the principal:
rewriting equation (1) in terms of P:
therefore
Profit made = 21385.322 - 19840.10 = $ 1545.222.
(1 point) Your rich uncle the bequest require that this income stream be paid continuously into a...