A certain loan program offers an interest rate of 2.5% per year, compounded continuously. Assuming no payments are made, how much would be owed after seven years on a loan of 3900?

Solution

Solution

Amount : 4645.86

Solution steps

Translate the problem into an equation:

A = 3900 e^{0.025 \cdot 7}

3900 e^{0.025 \cdot 7} = 4645.86024 \dots

Round to the nearest hundredth:

4645.86

Amount : 4645.86

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