Question

You put $900 into an account earning 2% interest compounded continuously. Find the amount in the account at the end of 12 years.

Answer 1

Given:

Principal value = $900

Rate of interest = 2% compounded continuously.

Time  = 12 years.

To find:

The amount in the account at the end of 12 years.

Solution:

If the interest compounded continuously, then the formula for amount :

$A=Pe^{rt}$

Where, P is principal, r is rate of interest, t is numbers of years.

Putting P=900, r=0.02 and t=12, we get

$A=900e^{0.02(12)}$

$A=900e^{0.24}$

$A=1144.12423529$

$A\approx 1144.12$

Therefore, the amount in the account at the end of 12 years is about $1144.12.