Juan and Lara deposit 700.00 into a savings account which earns 5% interest compounded continuously. They want to use the money in the account to go on a trip in 2 years. How much will they be able to spend?

Solução

J u an an d L a r a d e p os i t 700.00 in t o a s a v in g s a cco u n t w hi c h e a r n s 5% in t eres t co m p o u n d e d co n t in u o u s l y . T h ey w an t t o u se t h e m o n ey in t h e a cco u n t t o g o o n a t r i p in 2 ye a rs . Ho w m u c h w i ll t h ey b e ab l e t o s p e n d ?

Amount : 773.62

Passos da solução

Translate the problem into an equation:

A = 700 e^{0.05 \cdot 2}

700 e^{0.05 \cdot 2} = 773.61964 \dots

Round to the nearest hundredth:

773.62

Amount : 773.62