Harper invested 3,200 in an account paying an interest rate of 7% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest ten dollars, would be in the account after 6 years?

Solution

H a r p er in v es t e d 3, 200 in an a cco u n t p a y in g an in t eres t r a t e o f 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 t e n d o ll a rs, w o u l d b e in t h e a cco u n t a f t er 6 ye a rs ?

Amount : 4870.28

Solution steps

Translate the problem into an equation:

A = 3200 e^{0.07 \cdot 6}

3200 e^{0.07 \cdot 6} = 4870.27697 \dots

Round to the nearest hundredth:

4870.28

Amount : 4870.28