Question

A savings account with an initial deposit of $6,000 has an annual interest rate of 2.5%. The interest on the account is compounded continuously. What is the

balance of the account, to the nearest cent, after 2 years?
Enter the correct answer in the box.

Answer 1

`\large \boxed{\$6307.63}`

Explanation:

We can use the formula for interest compounded continuously.

`\begin{array}{rcl}A & = & Pe^(rt)\\& = & 6000e^(0.025 * 2)\\& = &6000e^(0.050)\\& = & 6000* 1.05127\\& = &\mathbf{\$6307.63}\\\end{array}\\\text{The balance on the account is $\large \boxed{\mathbf{\$6307.63}}$}`