Modeling with Differential Equations: Quiz
Problem 3
Write the differential equation described by the following:
You have $50 in a bank account. You add $500 at the end of each year, and the account earns 3% interest per year compounded continuously.
Answers, problem 3
We will refer to the increase in the amount in the account per year as y′. We know that every year the amount in the account increases by $500 plus 3% of the amount in the account. Therefore,
y′ = 500 + .03y