Question

1. A friend invests $320 in an account that pays 3% annual interest

compounded continuously. Which is the best estimate of the amount of
interest the account earns between the end of the 4th year and the end of
the 5th year?
A. $9
B. $11
C. $52
D. $61

Answer 1

B. $11

Explanation:

At end of 4th year:

`320 {e}^(.03 * 4) = 360.80`

At end of 5th year:

`320 {e}^(.03 * 5) = 371.79`

Interest earned between end of these two years:

`371.79 - 360.80 = 10.99`