A total of $10,000 is invested at an annual interest rate of 3%. Find the balance after 5 years if the interest is compounded a) quarterly and b) continuously.

Step-by-step explanation:

We will need 2 different equations for this problem. For compounding a certain number of times a year, the formula is

so let's do that first. Filling in we get

and simplifying a bit gives us

and a bit more,

and then

A(t) = 10000(1.161184142) so

A(t) = 11611.84

Then for the compounding continuously, the formula is

and simplify a bit to\

Now raise e to the power of .15 on your calculator to get

A(t) = 10000(1.161834243) so

A(t) = 11618.34

Not too much of a difference between the 2 values at the end.

answer:

your answer is: c. 196 7/8 in^3.