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you plan to invest 1000$ in an account for one year. how much more money will you have at the end of the year if you choose an account that earns 6% annual interest compounded continuously versus an account that earns 6% annual interest compounded quarterly? explain.

Continuous compounding makes .48 more

Step-by-step explanation:

Continuous Compound interest

A = Pe^(rt)

Where A is the amount in the account, P is the principal, r is  the rate,  t is the time

P = 1000

r = .06

t=1

A = 1000 e^(.06*1)

A =1061.84

The formula for compound interest is

A = P (1 + r/n) ^ (rt)

where A is the amount in the account , P is the principal, r is  the rate, n is the number of times per year, t is the time

P = 1000

r = .06

n = 4 times per year

t=1

A = 1000 (1+.06/4) ^(4*1)

A = 1000(1.015)^4

A = 1061.36

The difference is

1061.84-1061.36 = .48

2

step-by-step explanation: