Question

Suppose you discover an expired library book in the attic for which your great-great-grandfather owes a fine of 30c for 100 years. If a penalty owed grows exponentially at 5% per year in continuous compound interest, how much would you have? What to pay if you return the book today? Rta. 44.52

Answer 1

$A=0.30e^{0.05*100}=0.30e^{5}=\$44.52.$