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Greg wanted to buy a new guitar. Greg deposited 100.00 into a new savings account that earns interest compounded continuously. After 1 year, he withdrew the entire balance of 114.00 and bought the guitar. What was the interest rate on the account?

Solution

Solution

Rate : 13.10282 \dots %

Solution steps

Translate the problem into an equation:

114 = 100 e^{r \cdot 1}

Solve for

r, 114 = 100 e^{r \cdot 1} : r = 13.10282 \dots %

Rate : 13.10282 \dots %

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