Chapter 6.2, Problem 35E

To determine

To determine which account has the greater principal and which account has a greater balance after 10 years

Answer to Problem 35E

The account that has greater principal is o education and the account that has a greater balance after 10 years is of education

Explanation of Solution

Given information:

Consider the given information,

For house, $H=3225e^{{}^{0.005t}}$ (in dollars)

And the graph shows the education fund over time. Both are compounded continuously.

As from the graph, it is clear that the principal of education is greater than principal of house i.e. $4856>3225$ .

And after 10 years, the education amount will have greater balance than housing amount i.e. education $=7200$ and house $=3224e^{\left(0.000005\times 10\right)}=5315$