A certain loan program offers an interest rate of 5% per year, compounded continuously. Assuming no payments are made, how much would be owed after seven years on a loan of \$3700?

Solution

A certain loan program offers an interest rate of 5% per year, compounded continuously. Assuming no payments are made, how much would be owed after seven years on a loan of $3700?

Solution

Amount : 5250.55

Solution steps

Translate the problem into an equation:

A = 3700 e^{0.05 \cdot 7}

3700 e^{0.05 \cdot 7} = 5250.54992 \dots

Round to the nearest hundredth:

5250.55

Amount : 5250.55

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