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Suppose that \$2200 is borrowed for five years at an interest rate of 4.5% per year, compounded continuously. Find the amount owed, assuming no payments are made until the end.Do not round any intermediate computations, and round your answer to the nearest cent.

Solution

Suppose that $2200 is borrowed for five years at an interest rate of 4.5% per year, compounded continuously. Find the amount owed, assuming no payments are made until the end.Do not round any intermediate computations, and round your answer to the nearest cent.

Solution

Amount : 2755.11

Solution steps

Translate the problem into an equation:

A = 2200 e^{0.045 \cdot 5}

2200 e^{0.045 \cdot 5} = 2755.10997 \dots

Round to the nearest hundredth:

2755.11

Amount : 2755.11

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