Question

Katie deposited $2,000 into a new savings account that paid interest at an annual rate of 3%, compounded continuously. If there were no other transactions, approximately how much money was in Katie's account 6 years after she made the deposit?

Answer 1

Answer: $ 2388.10

Explanation:

Given: Principal value : P= $2,000

annual rate : r= 3% = 0.03

Time : t= 6 years

Formula to calculate the accumulated amount if compounded continuously :-

`A=P(1+r)^t`

`A=2000(1+0.03)^6\\\\=2000(1.03)^6\\\\=2000(1.1940523)\\\\=2388.10`

Hence, Money in Katie's account after 6 years = $ 2388.10