Joseph invested 16,000 in an account paying an interest rate of 5.7% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 14 years?

Solution

J ose p h in v es t e d 16, 000 in an a cco u n t p a y in g an in t eres t r a t e o f 5.7% 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 ce n t, w o u l d b e in t h e a cco u n t a f t er 14 ye a rs ?

Amount : 35537.51

Solution steps

Translate the problem into an equation:

A = 16000 e^{0.057 \cdot 14}

16000 e^{0.057 \cdot 14} = 35537.50871 \dots

Round to the nearest hundredth:

35537.51

Amount : 35537.51