Aiso deposits $130/month in a savings account paying 5% /year compounded continuously. Estimate the amount that will be in his account after 5 years. Round your answer to the nearest dollar.
A) $8,862
B) $10,096
C) $4,541
D) $11,005

Question

Aiso deposits $130/month in a savings account paying 5% /year compounded continuously. Estimate the amount that will be in his account after 5 years. Round your answer to the nearest dollar. ​
A) $8,862
B) $10,096
C) $4,541
D) $11,005

Quizplus · Accepted Answer

The amount in the account after 5 years is given by the formula:A = Pe^(rt)where:P is the principal (the amount deposited each month)r is the annual interest rate (as a decimal)t is the time in yearsIn this case, P = $130, r = 0.05, and t = 5. So,A = 130e^(0.05*5) = 130e^0.25 = 130*1.284 = $167.52The amount in the account after 5 years, rounded to the nearest dollar, is $168.

Aiso Deposits $130/month in a Savings Account Paying 5% /Year