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Integrals and Banking

  1. Mar 9, 2009 #1
    1. The problem statement, all variables and given/known data

    A deposit of $2500 is made in a savings account earning 12% interest cpmpounded continuously. Find the average balance in the account during the first two years.

    2. Relevant equations



    3. The attempt at a solution
    I know I'm suppose to set up an integral from 0 to 2 and then multiple the integral by .5. I was just wondering if someone can explain how to set up the actual integral on the inside. I mean Im not sure what equation I'm using.
     
  2. jcsd
  3. Mar 9, 2009 #2

    HallsofIvy

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    so the principle is given by [itex]P= P_0e^1.12t[/itex] and the interest is [itex]P_0(1- e^{1.12t}[/itex]. That is what you need to integrate from 0 to 2.

     
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