Parker invested 7,800 in an account paying an interest rate of 1.7% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 11 years?

Solution

P a r k er in v es t e d 7, 800 in an a cco u n t p a y in g an in t eres t r a t e o f 1.7% co m p o u n d e d co n t in u o u s l y . A ss u min g n o d e p os i t s or w i t h d r a w a l s a re ma d e, h o w m u c h m o n ey, t o t h e n e a res t d o ll a r, w o u l d b e in t h e a cco u n t a f t er 11 ye a rs ?

Amount : 9403.89

Solution steps

Translate the problem into an equation:

A = 7800 e^{0.017 \cdot 11}

7800 e^{0.017 \cdot 11} = 9403.89282 \dots

Round to the nearest hundredth:

9403.89

Amount : 9403.89