Question

Ty decided to invest $600 in an account and was able to take out $670 from the account after 8 years. The interest in the account was compounded continuously. What was the interest rate for his account?

Answer 1

Answer:

r ≈ 1.375%

Step-by-step explanation:

P = $600.00

A = $670.00

t = 8 years

r = ? annual interest, compounded continuously.

$A=Pe^{rt}$

$670=600e^{8r}$

$e^{8r}=\frac{670}{600}$

$log_{e} e^{8r} = log_{e}\frac{67}{60}$  

$8rlog_{e}e = log_{e}\frac{67}{60}$

$log_{e}e = 1$

8r ≈ 0.11 ⇒ r ≈ 0.01375 = 1.375%