Moneysaver's Bank offers a savings account that earns 2.5% interest per year, compounded continuously. If Christine deposits 3300, how much will she have in the account after two years, assuming she makes no withdrawals?

Solution

M o n eys a v e r^{'} s B ank o ff ers a s a v in g s a cco u n t t ha t e a r n s 2.5% in t eres t p er ye a r, co m p o u n d e d co n t in u o u s l y . I f C h r i s t in e d e p os i t s 3300, h o w m u c h w i ll s h e ha v e in t h e a cco u n t a f t er tw o ye a rs, a ss u min g s h e mak es n o w i t h d r a w a l s ?

Amount : 3469.19

Solution steps

Translate the problem into an equation:

A = 3300 e^{0.025 \cdot 2}

3300 e^{0.025 \cdot 2} = 3469.19461 \dots

Round to the nearest hundredth:

3469.19

Amount : 3469.19