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Gabriel and Belle deposited 10,000.00 into a savings account which earns interest compounded continuously. After 1 year, they had 11,039.00 in the account which they used to go on a trip. What was the interest rate on the account?

Solution

Gabriel and Belle deposited 10, 000.00 into a savings account which earns interest compounded continuously. After 1 year, they had 11, 039.00 in the account which they used to go on a trip. What was the interest rate on the account?

Solution

Rate : 9.88493 \dots %

Solution steps

Translate the problem into an equation:

11039 = 10000 e^{r \cdot 1}

Solve for

r, 11039 = 10000 e^{r \cdot 1} : r = 9.88493 \dots %

Rate : 9.88493 \dots %

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