Question

A person initially deposits $500 in a savings account that pays interest that pays interest at a rate of 4% per year compounded continuously. Suppose the person arranges for $10 per week to be deposited automatically into the savings account.

a) Write a differential equation for P(t), the amount on deposit after t years and solve.

b) Find the amount on deposit after 5 years.

Hint: dP/dt = 0.04P + 520.

Answer #1

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