Question

NEED HELP ASAP!!

Ted invests $5,042 in a savings account a fixed annual interest rate of 3% compounded continuously. What will the account balance be after 5 years?

Answer 1

$5,857.97

Explanation:

You are going to want to use the continuous compound interest formula, which is shown below.

`A = Pe^(rt)`

A = total

P = principal amount

r = interest rate (decimal)

t = time (years)

First change 3% into the decimal form:

3% ->
`(3)/(100)` -> 0.03

Now lets plug in the values into the equation:

`A=5,042e^(0.03(5))`

`A=5,857.97`

Ted's account balance after 5 years will be $5,857.97