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11 May, 21:06

Stanley Bank offers a money market account that earns 1.85% compounded continuously: a) If $10,000 is invested in this type of account, how much will it be worth in 3 years? b) How long will it take for the account to be worth $15,000?

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  1. 11 May, 21:52
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    a) $1056.33 b) 23 years

    Step-by-step explanation:

    a) 10000 (1+1.85/100) ^3=10565.33 (2d. p.)

    b) let x be the no. of years

    15000 = 10000 (1+1.85/100) ^x

    1.5 = 1.0185^x

    ln both sides

    ln 1.5 = x ln 1.0185

    x = ln 1.5/ln 1.0185

    =22.11

    =23 years (rounded up)
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