Find the compound interest earned by the deposit. Round to the nearest cent.
-$3000 compounded continuously at 3.3% for 20 months. (Assume 608 days.)Round the answer to the nearest dollar.

Question

Quizplus · Accepted Answer

The formula for compound interest compounded continuously is $A = Pe^{rt}$, where $A$ is the amount after time $t$, $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. For this problem, $P = $3000$, $r = 0.033$ (3.3% as a decimal), and $t = \frac{608}{365}$ years (since there are 608 days). Plugging these values into the formula gives $A = 3000e^{0.033 \times \frac{608}{365}}$. Calculating this gives $A \approx 3170$. The interest earned is $A - P = 3170 - 3000 = $170$, rounded to the nearest dollar.

Find the Compound Interest Earned by the Deposit