Question

You invested $4,200 into an account that pays an interest rate of 3.5% compounded continuously. What is the balance of your account in 5 years?. Use formula

A=Pert

Answer 1

`A=\$5003.2`

Explanation:

Use the exponential growth formula

`A = Pe ^ {rt}`

Where A is the final amount in the account, P is the initial amount, r is the growth rate and t is the time in years

In this problem

We know that

`P=4,200\\\\r=(3.5\%)/(100\%)= 0.035\\\\ t=5\ years`

So

`A = 4,200e^(0.035t)`

Finally after 5 years the balance of the account is:

`A=\$5003.2`