If $1000 is invested in an account that pays 7% interestcompounded n times each year

Chapter 1, Problem 21

(choose chapter or problem)

If $1000 is invested in an account that pays 7% interest compounded n times each year, then in 10 years there will be \(1000(1+0.07 / n)^{10 n}\) dollars in the account. How much money will be in the account in 10 years if the interest is compounded quarterly (n = 4)? Monthly (n = 12)? Daily (n = 365)? Determine the amount of money that will be in the account in 10 years if the interest is compounded continuously, that is, as \(n \rightarrow+\infty\).

Equation Transcription:

1000(1 + 0.07/n)10n

n

Text Transcription:

1000(1 + 0.07/n)^10n

n right arrow + infinity

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