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Question 5.P.10: Suppose that $2000 is deposited each year, on a continuous b......

Suppose that $2000 is deposited each year, on a continuous basis, into a savings account that pays 6% per year, compounded continuously. How much money will have accumulated after 12 years?

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With \bar{A} = $2000 per year, (5.9) gives

\\\\ F  =  \bar{A}\frac{e^m  –  1}{r}    (5.9)  \\\\ =  \$2000\frac{e^{(0.06)(12)}  –  1}{0.06}  =  \$2000(17.5739)  =  \$35  147.77

Alternatively, using the tabular values in Appendixes C and D,

F = $2000[A/\bar{A}, 6%] [F/A, 6%, 12] = $2000(1.030609)(17.0519) = $35 147.68

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