Jackson deposited $5000 at 3.8% interest compound continuously when he was 18 years old. How much will be in the account when he is 40 years old if he made no other deposits or …

Question

asked Jul 24, 2019 131k views

1 Answer

Mnabil · Answer 1 · 2019-07-28T10:06:07+0000

Answer:

$11535.60

Explanation:

We have been given that Jackson deposited $5000 at 3.8% interest compound continuously when he was 18 years old.

To find the amount that Jackson will earn when he is 40 years old, we will use compound interest formula.

$A=P\cdot e^(rT)$

A= Amount after T years.

P= Principal amount.

e= Mathematical constant e.

r= Interest rate (in decimal form).

T= Time in years.

Let us convert our given interest rate into decimal form.

$3.8\text{ percent}=(3.8)/(100)=0.038$

Upon substituting our given values in above formula we will get,

$A=5000\cdot e^((0.038* (40-18)))$

$A=5000\cdot e^((0.038* 22))$

$A=5000\cdot e^(0.836)$

$A=5000\cdot 2.307120015126555$

$A=11535.600075632775\approx 11535.60$

Therefore, Jackson will have $11535.60 in his account when he is 40 years old.