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Popular Word Problems >

Suppose that 2700 is borrowed for two years at an interest rate of 4% per year, compounded continuously. Find the amount owed, assuming no payments are made until the end.

Solution

S u pp ose t ha t 2700 i s b orro w e d f or tw o ye a rs a t an in t eres t r a t e o f 4% p er ye a r, co m p o u n d e d co n t in u o u s l y . F in d t h e am o u n t o w e d, a ss u min g n o p a y m e n t s a re ma d e u n t i l t h e e n d .

Solution

Amount : 2924.88

Solution steps

Translate the problem into an equation:

A = 2700 e^{0.04 \cdot 2}

2700 e^{0.04 \cdot 2} = 2924.87508 \dots

Round to the nearest hundredth:

2924.88

Amount : 2924.88

Popular Examples

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