Sandra decided to invest 14,329 into a savings account that compounds continuously. After 12 years, the account has a balance of 26,282.47. At what interest rate is the account compounding?

Solution

Sandra decided to invest 14, 329 into a savings account that compounds continuously. After 12 years, the account has a balance of 26, 282.47. At what interest rate is the account compounding?

Solution

Rate : 5.05513 \dots %

Solution steps

Translate the problem into an equation:

26282.47 = 14329 e^{r \cdot 12}

Solve for

r, 26282.47 = 14329 e^{r \cdot 12} : r = 5.05513 \dots %

Rate : 5.05513 \dots %

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