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Popular Word Problems >

you invest 4000 dollars in an account to save for college. It pays 4.5% annual interest compounded continuously. what would be the balance in the account after 2 years

Solution

yo u in v es t 4000 d o ll a rs in an a cco u n t t o s a v e f or co ll e g e . I t p a ys 4.5% ann u a l in t eres t co m p o u n d e d co n t in u o u s l y . w ha t w o u l d b e t h e ba l an ce in t h e a cco u n t a f t er 2 ye a rs

Solution

Amount : 4376.7

Solution steps

Translate the problem into an equation:

A = 4000 e^{0.045 \cdot 2}

4000 e^{0.045 \cdot 2} = 4376.69713 \dots

Round to the nearest hundredth:

4376.7

Amount : 4376.7

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