Nathaniel invested 2,900 in an account paying an interest rate of 5.4% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 11 years?

Solution

N a t hani e l in v es t e d 2, 900 in an a cco u n t p a y in g an in t eres t r a t e o f 5.4% 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 ce n t, 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 : 5252.53

Solution steps

Translate the problem into an equation:

A = 2900 e^{0.054 \cdot 11}

2900 e^{0.054 \cdot 11} = 5252.53457 \dots

Round to the nearest hundredth:

5252.53

Amount : 5252.53