A) Money is deposited in a bank account with a nominal annual interest rate of 4

Question

A) Money is deposited in a bank account with a nominal annual interest rate of 4% compounded
continuously. Let M = M(t) be the amount of money in the account at time t. Write a
differential equation whose solution is M(t). Assume there are no additional deposits and no
withdrawals.

B) Same as in #1, except now you are adding an extra $1000 per year to the bank account.
Assume there are no additional deposits and no withdrawals.

Explanation / Answer

d M(t) = Mo (1+r)^t dt => dM(t)/dt =Mo (1+r)^t dt Mo is initial deposit b) if we add addn 1000 then d M(t) = (Mo+1000) (1+r)^t dt => dM(t)/dt =(Mo+1000) (1+r)^t dt

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