Question

If the Laffite family deposits $8500 in savings account at 6.75% interest, compounded continuously, how much will be in the account after 25 years

Answer 1

Option b

Explanation:

We have a compound interest problem. With an annual interest rate of 0.675 and an initial payment of 8500, with t = 25 years

Then you must use the annual compound interest formula, which is represented by a growing exponential function:

`y = e ^(ht)`

Where:

h is the interest rate of 0.675

y is the money in the savings account as a function of time

Then substitute the values in the formula and we have:

`y = e ^(0.675(25))`

`y = 45,950.57`