Michael F. answered • 08/14/14

Tutor

4.8
(10)
Mathematics Tutor

A=Be

^{rt}for continuous compoundingA=27500, B=22000, t=4

lnA=lnB+rt

r=(1/t)ln(A/B)=(1/4)ln(275/220)=0.055785888

Chalyce H.

asked • 08/13/14 and it is now worth $27,500 (no additional deposits were made). if the account is compared to a bank account paying interest that is compounded continuously, what interest rate would the bank account have to pay to match the mutual fund accounts earnings?

Round the answer to the nearest hundredth of a percent.

Follow
•
2

Add comment

More

Report

Michael F. answered • 08/14/14

Tutor

4.8
(10)
Mathematics Tutor

A=Be^{rt} for continuous compounding

A=27500, B=22000, t=4

lnA=lnB+rt

r=(1/t)ln(A/B)=(1/4)ln(275/220)=0.055785888

Ask a question for free

Get a free answer to a quick problem.

Most questions answered within 4 hours.

Find an Online Tutor Now

Choose an expert and meet online. No packages or subscriptions, pay only for the time you need.