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Popular Word Problems >

Marian invests 2,874.65 in a savings account with a fixed annual interest rate of 1.88 % compounded continuously. What will the account balance be after 2 years?

Solution

M a r ian in v es t s 2, 874.65 in a s a v in g s a cco u n t w i t h a f i x e d ann u a l in t eres t r a t e o f 1.88 % co m p o u n d e d co n t in u o u s l y . Wha t w i ll t h e a cco u n t ba l an ce b e a f t er 2 ye a rs ?

Solution

Amount : 2984.79

Solution steps

Translate the problem into an equation:

A = 2874.65 e^{0.0188 \cdot 2}

2874.65 e^{0.0188 \cdot 2} = 2984.79458 \dots

Round to the nearest hundredth:

2984.79

Amount : 2984.79

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