Thats too much!

Algebra Level 2

If you invest $500 at a rate of 9% continuously compound interest, how much would you have to pay back after 10 years?

Give your answer (in $) to two decimal places.


The answer is 1229.80.

Ashish Menon by Ashish Menon , 20, India

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1 solution

Ashish Menon
Jun 9, 2016

Let P \text{P} be the principal amount, r \text{r} be the rate of interest, t \text{t} be the time period, A \text{A} be the amount and I \text{I} be the interest.
A = Pe rt = 500 × e 9 100 × 10 = 500 × 2.718 0.9 = 500 × 2.459 = 1229.80 \begin{aligned} \text{A} & = {\text{Pe}}^{\text{rt}}\\ & = 500 × {\text{e}}^{\tfrac{9}{100} × 10}\\ & = 500 × {2.718}^{0.9}\\ & = 500 × 2.459\\ & = \color{#3D99F6}{\boxed{1229.80}} \end{aligned}

4 Helpful 0 Interesting 0 Brilliant 0 Confused

Did the same way. "continuously compounded" is a very interesting thing. ;)

Abhay Tiwari - 5 years ago

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It is cool when we are earning :)

Ashish Menon - 5 years ago

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Yeah, defnitely XD

Abhay Tiwari - 5 years ago

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