In a bank principal increases at the rate of 5% per year. An amount of ` 1000 is deposited with this bank, how much will it worth after 10 years (e^0.5 = 1.648).

Question

In a bank principal increases at the rate of 5% per year. An amount of ` 1000 is deposited with this bank, how much will it worth after 10 years (e 0.5 = 1.648).

Philoid · Accepted Answer

Let p, and t represent the principal, time respectively.

It is the given that the principal increases continuously at the rate of 5% per year.

=

Integrating both sides, we get:

=

= p = .....-(i)

It is given that when t = 0, p = 1000

= 1000 = e^c .....--(2)

Now,

Putting t = 10,we get

=

= p = 1000 x 1.648

= p = 1648

In a bank principal increases at the rate of 5% per year. An amount of ` 1000 is deposited with this bank, how much will it worth after 10 years (e0.5 = 1.648).

In a bank principal increases at the rate of 5% per year. An amount of ` 1000 is deposited with this bank, how much will it worth after 10 years (e^0.5 = 1.648).