Practice!

Sample Problem

Jackie’s stepbrother deposited $10000 into a trust fund that pays 5% interest, compounded continuously. It is specified that the money in this trust fund will only be given to Jackie when she goes to college at age 18. Suppose Jackie’s stepbrother made this trust fund when Jackie was 5, how much will Jackie get when she’s 18? Round your answer to the nearest dollar.

$

Solution

18-5=13 years to accumulate interest continuously

A=Pert

A=10000e0.05*13=$19155.4083