Question

25. If you deposit $2,810 in an account earing 3% interest compounded continuously, how much will the account hold in 30 months?

Answer 1

The amount deposited is

$P=\text{ \ 2,810}$

The interest rate compounded continuously is given as

$\begin{gathered} r=3\text{ \%} \\ r=\frac{3}{100}-0.03 \end{gathered}$

The time in years will be

$\begin{gathered} t=\frac{30}{12} \\ t=2.5\text{years} \end{gathered}$

The formula for the amount for continuous compound interest is given below as

$A=Pe^{rt}$

By substituting the values, we will have

$\begin{gathered} A=Pe^{rt} \\ A=2,820\times e^{(0.03\times2.5)} \\ A=3028.85 \end{gathered}$

Hence,

The final answer = $3,028.85