Question

A man deposited $10,500 in a savings account when his son was bom. The nominal Interest rate was 10% per year, compounded continuously. On the son's 20th birthday, the accumulated sum is withdrawn from the account. How much will this accumulated amount be? Click the icon to view the interest and annuity table for continuous compounding when i= 10% per year. This accumulated amount will be $ (Round to the nearest dollar.) AUP Continuous Compounding: 10% Single Payment Uniform Series Compound Compound Capital Amount Present Amount Present Sinking Fund Recovery Factor Worth Factor Factor Worth Factor Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Glven P Given F Given A Given A Given F Given P F/P P/F FIA P/A A/F 1.1052 0.9048 1.0000 0.9048 1.0000 1.1052 1.2214 0.8187 2.1052 1.7236 0.4750 0.5802 1.3499 0.7408 3.3266 2.4644 0.3006 0.4056 1.4918 0.6703 4.6764 8.1347 0.2138 0.3190 1.6487 0.6065 6.1683 3.7412 0.1621 0.2673 1.8221 0.5488 7.8170 4.2900 0.1279 0.2331 2.0138 0.4966 9.6391 4.7866 0.1037 0.2089 2.2255 0.4493 11.6529 5.2360 0.0858 0.1910 2.4596 0.4066 13.8784 5.6425 0.0721 0.1772 2.7183 0.3679 16.3380 6.0104 0.0612 0.1664 3.0042 0.3329 19.0563 6.3433 0.0525 0.1576 3.3201 0.3012 22.0604 6.6445 0.0453 0.1505 3.6693 0.2725 25.3806 6.9170 0.0394 0.1446 4.0552 0.2466 29.0499 7.1636 0.0344 0.1398 4.4817 0.2231 33.1051 7.3867 0.0302 0.1354 4.9530 0.2019 37.5867 7.5886 0.0266 0.1318 5.4739 0.1827 42.5398 7.7713 0.0235 0.1287 6.0496 0.1653 48.0137 7.9366 0.0208 0.1260 6.6859 0.1496 54.0634 8.0862 0.0185 0.1237 7.3891 0.1353 60.7493 8.2215 0.0165 0.1216 Enter your answer in the answer box and then click Check Answer

Answer 1

Amount of deposit at birth=$10500

Rate of interest =i=10% compounded continuously

Time period=n=20%

Accumulated amount=10500*(F/P,0.10,20)=10500*7.3891=$77,585.55 or $77586