Question

You deposit $5,000 in an account that earns 2.34% annual interest compounded continuously.

Round your answer to the nearest cent. Find the balance after 4 years.

Answer 1

$5468

Explanation:

First, converting R percent to r a decimal

r = R/100 = 2.34%/100 = 0.0234 per year,

then, solving our equation

I = 5000 × 0.0234 × 4 = 468

I = $ 468.00

The simple interest accumulated

on a principal of $ 5,000.00

at a rate of 2.34% per year

for 4 years is $ 468.00.