Question

Kate puts $200 in a bank account with an interest rate of 2.3% compounded continuously. How much money will she have in six years

Answer 1

$229.60

Step-by-step explanation:

Principal = $200

Interest rate = 2.3% = 0.023

time = 6 years

We would apply a formula for contionus compounding:

`\begin{gathered} A=Pe^(rt) \\ \text{where A = amount} \\ P\text{ = principal} \\ r\text{ = rate} \\ t\text{ = time} \end{gathered}`

Inserting the values into the formula:

`\begin{gathered} A=200(e^(0.023*6)) \\ A=200(e^(0.138)) \end{gathered}`
`\begin{gathered} A\text{ = 200(1.14798)} \\ A\text{ = }229.60 \end{gathered}`

Amount of money Kate will have after 6 years is $229.60