Stan borrows $5,500 at a rate of 12% interest per year. What is the amount due at the end of 5 years if the interest is compounded continuously? In your final answer, include your calculations.
Accepted Solution
A:
Answer:1.) Without compound interest, you would earn only $8800.00. This means that thanks to the power of compound interest you will earn an additional $1191.83 in interest at the end of the 5 year term.2.) Using the compounded interest formula, you will earn $22883.01 after the 7 year term.3.) Because of the negative interest, the compounded amount is only $695,929.30.4.) Putting money in a saving account is saving money with a lower earning compared to investments. Investments have the higher potential of earning more than just having a basic savings account.Step-by-step explanation: