In a bank, principal increases continuously at the rate of 5% per year. An amount of Rs 1000 is deposited with this bank, how much will it worth after 10 years.

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Solution

Let p and t be the principal and time respectively.

It is given that the principal increases continuously at the rate of 5% per year.

Integrating both sides, we get:

Now, when t = 0, p = 1000.

⇒ 1000 = e^C … (2)

At t = 10, equation (1) becomes:

Hence, after 10 years the amount will worth Rs 1648.

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