Oliver deposited 7,000.00 into a new savings account that earns interest compounded continuously. After 1 year, the balance in the account was 7,690.00. What was the interest rate on the account?

Solution

Oliver deposited 7, 000.00 into a new savings account that earns interest compounded continuously. After 1 year, the balance in the account was 7, 690.00. What was the interest rate on the account?

Solution

Rate : 9.40106 \dots %

Solution steps

Translate the problem into an equation:

7690 = 7000 e^{r \cdot 1}

Solve for

r, 7690 = 7000 e^{r \cdot 1} : r = 9.40106 \dots %

Rate : 9.40106 \dots %

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