Suppose that 2700 is borrowed for two years at an interest rate of 4% per year, compounded continuously. Find the amount owed, assuming no payments are made until the end.

Solution

Solution

Amount : 2924.88

Solution steps

Translate the problem into an equation:

A = 2700 e^{0.04 \cdot 2}

2700 e^{0.04 \cdot 2} = 2924.87508 \dots

Round to the nearest hundredth:

2924.88

Amount : 2924.88

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