Can I get some help solving this problem using the compound interest formula? Thanks!

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Answer 1 · 2018-01-01T19:46:05

Please see below.

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If the interest is compounded continuously then it would be:

#A=Pe^(rt)#

#A=11000e^(0.0625*10)=11000e^0.625=20550.71#

If the interest is compounded semiannually then it would be:

#A=P(1+r/n)^(nt)# where #n# is the number of times interest is compounded per year. Semiannual would be #2# times per year.

#A=11000(1+0.063/2)^(2*10)=20453.96#

The investment with continuous compounding of interest would return more yield.