Question

If $1,800 is invested in a savings account offering interest at a rate of 4.5% per year, compounded continuously, how fast is the balance growing after 3 years

Answer 1

The total amount after 3 years is = $ 2054.10

Step-by-step explanation:

Given data

Principal Amount (P) = $ 1800

Rate of interest (R) = 4.5 %

Thus the total amount after 3 years compounded annually is given by the formula = P ×
`[1 +(R)/(100) ]^(3)`

⇒ 1800 ×
`[1 +(4.5)/(100) ]^(3)`

⇒ 2054.10

Thus the total amount after 3 years is = $ 2054.10

Compound interest earned in three years = 2054.10 - 1800 = $ 254.10