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Devin and Clare deposited 3,962.00 into a savings account which earns interest compounded continuously. After 1 year, they had 4,487.00 in the account which they used to go on a trip. What was the interest rate on the account?

Solution

Devin and Clare deposited 3, 962.00 into a savings account which earns interest compounded continuously. After 1 year, they had 4, 487.00 in the account which they used to go on a trip. What was the interest rate on the account?

Solution

Rate : 12.44353 \dots %

Solution steps

Translate the problem into an equation:

4487 = 3962 e^{r \cdot 1}

Solve for

r, 4487 = 3962 e^{r \cdot 1} : r = 12.44353 \dots %

Rate : 12.44353 \dots %

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