Question

The amount in an account with a beginning balance of $3000 and interest compounded continuously at an annual rate of 5.5% can be modeled by the equation a=3000e^(5.5t)
true or false?

Answer 1

False.

The applicable formula for amount in account (a) after t years is given by:

a = Pe^(rt); where a = Amount in an account, P = Amount deposited, r = Annual interest rate, t = time in years.

Substituting;
a = 3000e^(0.055t)

Answer 2

The continuously compounded formula is given by:
A=Pe^(rt)
where:
P=principle
r=rate
t=time
Thus from the information given:
P=$3000, rate=5.5%,  the formula will be:
A=3000e^(0.055t)

Thus the answer given is false.