Question

Doug deposits $4,998 into an interest-bearing account that is compounded continuously. He decides to not deposit or withdraw any money after the initial deposit. The following function represents the balance of the account, which is compounded continuously at a rate of r, after t years.

Which expression approximately represents the rate, r, at which the account is continuously compounded if the account balance is $6,614 after 7 years?
A.


B.


C.


D.

Answer 1

interest rate = 0.0400215403 or 4.00215403% or 4%

Explanation:

formula

final amount =

initial amount times e^(interest rate times time)

6614 = 4998 times e^(interest rate times 7)

(6614 ÷ 4998) = e^(interest rate times 7)

1.32332933173 = e^(interest rate times 7)

ln means natual log

ln(1.32332933173) = ln(e^(interest rate times 7))

0.28015078214 = interest rate times 7

0.28015078214 ÷ 7 = interest rate

0.0400215403 = interest rate

utub dr ashley godbold

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