Serenity invested 3,100 in an account paying an interest rate of 2.9% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 12 years?

Solution

S ere ni t y 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 2.9% 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 12 ye a rs ?

Amount : 4390.32

Solution steps

Translate the problem into an equation:

A = 3100 e^{0.029 \cdot 12}

3100 e^{0.029 \cdot 12} = 4390.31997 \dots

Round to the nearest hundredth:

4390.32

Amount : 4390.32