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60.April would like to invest $200 in the bank for one year. Three banks all have a nominal APR of 1.5%, but compound the interest differently.

c. Bank C compounds interest continuously. What would April’s balance be after one year with this bank?

User Liecno
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1 Answer

1 vote

Answer:

$203.02

Explanation:

Since the bank in question compounds interest continuously, the following equation should be used to determine the final balance (B) in April's account:


B= 200*e^(i*t)

Where "e" is a mathematical constant approximated as 2.7183, "i" is the interest rate (1.5%) and "t" is the investment time in years (1):


B= 200*e^(0.015*1)


B= 203.02

April's balance would be $203.02 after one year.

User Maxian Nicu
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