Answer:
The answers are:
a. Jim's average balance over one year is $6339 (using an integer)
b. Jim will receive $76 as a bonus
Explanation:
For the future value of a deposited amount compounded continuously, the formula below is used:
[tex]F=P*e^{rt}[/tex]
where:
F = Future value
P = present value = $6000
е = Euler's constant = 2.7183
r = interest rate in decimal = 5.5% = 5.5/100 = 0.055
t = time in years = 1 year
∴ [tex]F=P*e^{rt}[/tex]
[tex]F=6000*1.05654 = 6,339.24[/tex]
Note that the constant 'e' can be used directly on the calculator
Future value = $6,339 [ to the nearest integer(whole number)]
b. 1.2% of the average balance = 1.2% of 6,339
= 1.2/100 × 6339
= 0.012 × 6339 = $76.07
= $76 ( to the nearest integer)
