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Popular Word Problems >

A person places 398 in an investment account earning an annual rate of 9.7%, compounded continuously, determine the amount of money, to the nearest cent, in the account after 7 years.

Solution

A p erso n pl a ces 398 in an in v es t m e n t a cco u n t e a r nin g an ann u a l r a t e o f 9.7%, co m p o u n d e d co n t in u o u s l y, d e t er min e t h e am o u n t o f m o n ey, t o t h e n e a res t ce n t, in t h e a cco u n t a f t er 7 ye a rs .

Solution

Amount : 784.82

Solution steps

Translate the problem into an equation:

A = 398 e^{0.097 \cdot 7}

398 e^{0.097 \cdot 7} = 784.81812 \dots

Round to the nearest hundredth:

784.82

Amount : 784.82

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