Upon the birth of their first child, a couple deposited $5000 in an account that pays 8% interest compounded continuously. The interest payments are allowed to accumulate. How much will the account contain on the child's eighteenth birthday?

Upon the birth of their first child, a couple deposited $5000 in an account that pays 8% interest compounded continuously. The interest payments are allowed to accumulate. How much will the account contain on the child's eighteenth birthday?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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Question

1. (Continuously compounded interest) If A (t) is the number of dollars in a savings
account at time t (in years) and the interest is compounded continuously at an annual
interest rate r, then =rA.
Upon the birth of their first child, a couple deposited $5000 in an account that pays 8%
interest compounded continuously. The interest payments are allowed to accumulate.
How much will the account contain on the child's eighteenth birthday?
w much will the acco

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