A principal of $120 is deposited in a 7% account and compounded continuously.

At the same time a

principal of $150 is deposited in a 5% account and compounded annually. How long does it take for the
amounts in the two accounts to be equal?

A first saving account pays 5% compounded annually. A second saving account pays 5% compounded
continuously. Which of the two investments is better in the long term?

What interest rate, compounded annually, is needed for a principal of $4,000 to increase to $4,500 in 10
year?

A person deposited $1,000 in a 2% account compounded continuously. In a second account, he

deposited $500 in a 8% account compounded continuously. When will the total amounts in both
accounts be equal? When will the total amount in the second accounts be 50% more than the total
amount in the second account?

A bank saving account offers 4% compounded on a quarterly basis. A customer deposit $200, in this type
of account, at the start of each quarter starting with the first deposit on the first of January and the
fourth deposit on the first of October. What is the total amount in his account at the end of the year?

An amount of $1,500 is invested for 5 years at the rates of 2% for the first two years, 5% for the third
year and 6% for the fourth and fifth years all compounded continuously. What is the total amount at the
end of the 5 years?

Answers