Andrew invested 3,100 in an account paying an interest rate of 2.1% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 16 years?

Solution

A n d re w in v es t e d 3, 100 in an a cco u n t p a y in g an in t eres t r a t e o f 2.1% 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 16 ye a rs ?

Amount : 4337.95

Solution steps

Translate the problem into an equation:

A = 3100 e^{0.021 \cdot 16}

3100 e^{0.021 \cdot 16} = 4337.95097 \dots

Round to the nearest hundredth:

4337.95

Amount : 4337.95