Question

Do not round any computations, and round your answer to the nearest cent

Answer 1

Given:

$\begin{gathered} r=2.5\%=0.025 \\ P=1700 \\ t=4years \end{gathered}$

To Determine: The amount after 4 years

Solution

To calculate the amount for a deposit compounded continuously, we would use the formula below

$A=Pe^{rt}$

Substitute the given into the formula

$\begin{gathered} A=1700e^{0.025\times4} \\ A=1700e^{0.1} \end{gathered}$$\begin{gathered} A=1700\times1.1051709 \\ A=1878.79 \end{gathered}$

Hence, the money saver in the next four years would have $1,878.79 in his account