Question

25. If you deposit $2,810 in an account earing 3% interest compounded continuously, how much will the account hold in 30 months?

Answer 1

The amount deposited is

`P=\text{ \$2,810}`

The interest rate compounded continuously is given as

`\begin{gathered} r=3\text{ \%} \\ r=(3)/(100)-0.03 \end{gathered}`

The time in years will be

`\begin{gathered} t=(30)/(12) \\ t=2.5\text{years} \end{gathered}`

The formula for the amount for continuous compound interest is given below as

`A=Pe^(rt)`

By substituting the values, we will have

`\begin{gathered} A=Pe^(rt) \\ A=2,820* e^((0.03*2.5)) \\ A=3028.85 \end{gathered}`

Hence,

The final answer = $3,028.85