Continuous Interest and Account Balance

The video tutorial explains how to calculate account balances using the continuous interest formula. It covers determining the balance after 2 and 5 years and finding the time required for the balance to reach $2,500. The tutorial uses the exponential growth formula, substituting values for time and interest rate, and demonstrates solving for time using logarithms.

What is the principal amount deposited in the bank?

• $1,000

• $1,500

• $2,000

• $2,500

Which formula is used to calculate continuous interest?

• A = P(1 + rt)

• A = P(1 + r/n)^(nt)

• A = Pe^(rt)

• A = P(1 + r)^t

What does the variable 'R' represent in the continuous interest formula?

• Account balance

• Time in years

• Annual interest rate

• Principal amount

How is the interest rate of 6% expressed as a decimal?

• 0.06

• 0.6

• 0.006

• 6.0

What is the account balance after 2 years?

• $1,800

• $1,900

• $2,000

• Calculated using the formula

What is the account balance after 5 years?

• $2,024.79

• $2,300.00

• $2,100.00

• $2,200.00

Which function on the calculator is used to calculate e raised to a power?

• 2nd LOG

• 2nd NATURAL LOG

• 2nd EXP

• 2nd POWER

What is the simplified fraction of 2,500 divided by 1,500?

• 5/2

• 3/2

• 2/3

• 5/3

What mathematical operation is used to solve for 'T' in the equation 2,500 = 1,500e^(0.06T)?

• Addition

• Subtraction

• Multiplication

• Taking the natural log

Approximately how many years will it take for the account balance to reach $2,500?

• 10.5 years

• 9.5 years

• 7.5 years

• 8.5 years