In a bank, principal increases continuously at the rate of $\text{5}$% per year. An amount of Rs $\text{1000}$ is deposited with this bank, how much will it worth after $\text{10}$ years $\left( {{\text{e}}^{\text{0}\text{.5}}}\text{=1}\text{.648} \right)$.
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Ans: Let the principal be $\text{p}$, according to principle increases at the rate of $\text{5}$% per year.
$\frac{dp}{dt}=\left( \frac{5}{100} \right)p$
Simplify the expression:
$\frac{dp}{dt}=\frac{p}{20}$
$\Rightarrow \frac{dp}{p}=\frac{1}{20}dt$
Integrate both side:
$\int \frac{dp}{p}=\int \frac{1}{20}dt$
$\Rightarrow \log p=\frac{t}{20}+C$
$\Rightarrow p={{e}^{\frac{t}{20}+C}}$
$\Rightarrow p=A{{e}^{\frac{t}{20}}}\,\,\left( A={{e}^{C}} \right)$
At $\text{t=0}$, $\text{p=1000}$:
$1000=A{{e}^{\frac{0}{20}}}$
$\Rightarrow A=1000$
Thus the relation of principal and time relation:
$\Rightarrow p=1000{{e}^{\frac{t}{20}}}$
At $\text{t=10}$:
$p=1000{{e}^{\frac{10}{20}}}$
$\Rightarrow p=1000{{e}^{0.5}}$
$\Rightarrow p=1000\times 1.648$
$\Rightarrow p=1648$
Thus after $\text{10}$ this year the amount will become Rs. $\text{1648}$.