The Kwans are saving for their daughter’s college education. If they deposit $12,000 in an account bearing 6.4% interest compounded continuously, how much will be in the account when Ann goes to college in 12 years?

For continuously compounded interest, use A = Pe^(rt), where P = $12,000, r = 0.064, and t = 12. Thus A = 12,000e^(0.064 × 12) = 12,000e^0.768 ≈ $25,865.41, so the account will contain about $25,865.41.

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