A bank pays interest by continuous compounding, that is ,by treating the interest rate as the instantaneous rate of change of principal. Suppose in an account interest accrues at 8% per year, compounded continuously. Calculate the percentage increase in such an account over one year. [take `e^(0. 08)~~1. 0833` ]

Explanation

Given,

`(dP)/(dt)=(Pr)/(100)`

`(dP)/P=(rdt)/(100)`

`logP=r/(100)t+c->(1)`

now at `t=0,P=P_0`

So,

`log|P_0|=0+c`

`log|P_0|=c->(2)`

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