Question

Moneysaver's Bank offers a savings account that earns 5% interest compounded continuously. If Ravi deposits $3200, how much will he have in the account
after six years, assuming he makes no withdrawals?
Do not round any intermediate computations, and round your answer to the nearest cent
x
5
?

Answer 1

the answer is 4160$

Answer 2

     After 6 years of investment of $3200 compounded continuously, final amount in the account will be $4319.55.

Moneysaver's Bank offers a saving account with the features as,

• Rate of interest = 5% annual
• Time of investment = 6 years
• Principal amount = $3200

Expression to calculate the final amount when compounded continuously,

Final amount = $P.e^{rt}$

Here, P = Principal amount

r = Rate of interest

t = Duration of investment

By substituting the values in the expression,

Final amount = $3200.e^{0.05\times 6}$

                      = 3200(1.3498588)

                      = 4319.548

                      ≈ $4319.55

  Therefore, after 6 years of investment of $3200, final amount in the account will be $4319.55.

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