Question

You put $825 into a savings account at an interest rate of 5.2% compounded continuously. How much money will be in that account after 4.5 years? Round to dollars and cents

Answer 1

Given

The principal amount is $825.

The rate of interest is 5.2%.

The time taken is 4.5 years.

To find the amount when it is compounded continuously.

Explanation:

It is given that,

The principal amount is $825.

The rate of interest is 5.2%.

The time taken is 4.5 years.

Since

$\begin{gathered} A=Pe^{rt} \\ =825(e^{\frac{5.2}{100}\times4.5}) \\ =825(e^{0.234}) \\ =825\times1.2636 \\ =1042.51 \end{gathered}$

Hence, the amount is $1042.51.