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A deposit of $5000 is made in a trust fund that pays 7.5% interest, compounded continuously. It is specified that the balance will be given to the college from which the donor graduated after the money has earned interest for 50 years. How much will the college receive?

Respuesta :

estebancgo

Answer:

the college will receive 185,948.7

Explanation:

This problem can be solved applying the principle for calculating the future value, as here is not said we will asumed the 7.5% as componded annually, so:

[tex]FV=PV*(1+i)^{n}[/tex]

where FV is future value, PV is the present value, i is the periodic interest rate and n is the number of periods. So applying to this particular problem we have:

[tex]FV=5,000*(1+0.075)^{50}[/tex]

[tex]FV=185,948.7[/tex]