SOLUTION: An initial amount of money is placed in an account at an interest rate of
1%
per year, compounded continuously. After five years, there is
$2049.98
in the account. Find the
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Question 894988: An initial amount of money is placed in an account at an interest rate of
1%
per year, compounded continuously. After five years, there is
$2049.98
in the account. Find the initial amount placed in the account. Round your answer to the nearest cent.
Found 2 solutions by reviewermath, lwsshak3:
Answer by reviewermath(1029) (Show Source): You can put this solution on YOUR website!
Q:
An initial amount of money is placed in an account at an interest rate of
1%
per year, compounded continuously. After five years, there is
$2049.98
in the account. Find the initial amount placed in the account. Round your answer to the nearest cent.
A:
Let x = initial amount
= $1950 [Answer]
Answer by lwsshak3(11628) (Show Source): You can put this solution on YOUR website!
An initial amount of money is placed in an account at an interest rate of
1% per year, compounded continuously. After five years, there is $2049.98
in the account. Find the initial amount placed in the account. Round your answer to the nearest cent.
***
Formula for continuous compounding: A=Pe^rt, r=interest rate, t=number of years, A=amount after t-years
For given problem:
r=1%=.01
t=5
A=$2049.98
..
P=A/e^rt=2049.98/e^(.01*5)
P=2049.98/e^(.05)=1950.00
initial amount placed in the account=$1950.00
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