Calculus (3rd Edition)

Published by W. H. Freeman
ISBN 10: 1464125260
ISBN 13: 978-1-46412-526-3

Chapter 7 - Exponential Functions - 7.5 Compound Interest and Present Value - Exercises - Page 355: 2


$$\$616.8 $$

Work Step by Step

Since $$ P_0= \$ 500,\ \ \ r=0.07 $$ and the rate is compounded continuously, so we use the compound interest formula \begin{aligned} P&=P_{0} e^{r t} \\ &=500 e^{0.07t} \end{aligned} Hence, after three years \begin{align*} P(3) &=500 e^{0.07(3)}\\ &=\$616.839 \end{align*}
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