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Popular Word Problems >

Callie invests 4,000 into an account at a 3% interest rate. The account compounds interest continuously.How much will Callie have in the account after 10 years if she leaves the account untouched?

Solution

C a ll i e in v es t s 4, 000 in t o an a cco u n t a t a 3% in t eres t r a t e . T h e a cco u n t co m p o u n d s in t eres t co n t in u o u s l y . Ho w m u c h w i ll C a ll i e ha v e in t h e a cco u n t a f t er 10 ye a rs i f s h e l e a v es t h e a cco u n t u n t o u c h e d ?

Solution

Amount : 5375.67

Solution steps

Translate the problem into an equation:

A = 4000 (1 + \frac{0.03}{1})^{1 \cdot 10}

4000 (1 + \frac{0.03}{1})^{1 \cdot 10} = 5375.66551 \dots

Round to the nearest hundredth:

5375.67

Amount : 5375.67

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