Question

You put $900 into an account earning 2% interest compounded continuously. Find the amount in the account at the end of 12 years.

Answer 1

Given:

Principal value = $900

Rate of interest = 2% compounded continuously.

Time = 12 years.

To find:

The amount in the account at the end of 12 years.

Solution:

If the interest compounded continuously, then the formula for amount :

`A=Pe^(rt)`

Where, P is principal, r is rate of interest, t is numbers of years.

Putting P=900, r=0.02 and t=12, we get

`A=900e^(0.02(12))`

`A=900e^(0.24)`

`A=1144.12423529`

`A\approx 1144.12`

Therefore, the amount in the account at the end of 12 years is about $1144.12.