Problema Solution
there is 10$ in a bank account in 1755 and left alone. Since then the money has been collecting interest. It was deposited on January 1, 1755. Since then it has been compounded quarterly with an annual interest rate of 5%. How much money is there on December 31, 2010?
Please use y=ab^x format
Answer provided by our tutors
let
P = $10 principal
t = 2010 - 1755 + 1 = 256 years
x = 4t = 4*256 = 1024 the total number of compounding periods
y = the future value
y = P(1 + 0.05/4)^x
y = 10(1 + 0.05/4)^1024
y = $3,345,897.65
click here to see the step by step calculation:
there will be $3,345,897.65 on December 31, 2010.