Continuous Compound Interest Word Problems Test

Question 1 of 5: Solve each word problem:

Amy invests $4,043 in a mutual fund with a fixed annual interest rate that is compounded continuously. After 16 years, the account balance reaches $12,391.21. What is the interest rate of her account?

Note: this example requires the use of logarithms. You can view an example here.

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10%

11.5%

Question 2 of 5: Solve each word problem:

Mary invests $2,177 in a savings account with a fixed annual interest rate that is compounded continuously. After 14 years, the account balance reaches $6,672.19. What is the interest rate of the account?

Note: this example requires the use of logarithms. You can view an example here.

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5.5%

4.25%

Question 3 of 5: Solve each word problem:

Jennifer invests a lump sum of money in a savings account with a fixed annual interest rate of 9% that is compounded continuously. After 10 years, the account balance reaches $14,000.06. What was the amount of the initial deposit?

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$6206

$5692

$5949

$5432

$4756

Question 4 of 5: Solve each word problem:

Lea invests a lump sum of money in a retirement account with a fixed annual interest rate of 5% that is compounded continuously. After 14 years, the account balance is $13,300.84. What was the amount of the initial deposit?

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$6348

$7119

$6605

$6682

$7325

Question 5 of 5: Solve each word problem:

Larry invests a lump sum of money in a bond fund with a fixed annual interest rate of 3% that is compounded continuously. After 5 years, the account balance reaches $3,387.91. What was the amount of the initial deposit?

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$2916

$3430

$3687

$3173

$2715

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