Question

You have saved $1350 and are now going to invest it. The account you have chosen will compound continuously and after 10 years you will have $1462. What interest rate will the account give you?

Answer 1

The account interest rate is 0.80%

Explanation:

A=P(1+r/100)^10

1462=1350(1+r/100)^10{divide both sides by 1350}

1462/1350=(1+r/100)^10{find the 10th root of both sides}

1.00800=1+r/100{multiply through by 100}

100.800=100+r

r=100.800-100

r=0.80%