Use the formula for continuous compounding to compute the balance in the account

Question

Use the formula for continuous compounding to compute the balance in the account after 1, 5, and 20 years. Also, find the APY for the account. A $10,000 deposit in an account with an APR of 4.75%. The balance in the account after 1 year is approximately $1-1 Round to the nearest cent as needed. The balance in the acount after 5 years is approximately Round to the nearest cent as needed.) The balance in the account after 20 years is approximately S Round to the nearest cent as needed.) The APY for the account is approximately [ ]% Round to two decimal places as needed.)

Explanation / Answer

A $10,000 deposit in an account with an APR of 4.75%

A)after 1st year=$10,000*e(0.0475*1)=$10,486.47

B)after 5 years=$10,000*e(0.0475*5)=$52432.32

C) after 20 years=$10,000*e(0.0475*20)=$209,729.24

D)apy=e(0.0475*1)-1=0.04865=4.87%

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