Suppose you invest $300 at annual interest rate of 4.5% compounded continuously. How much will you have in the account after 7.5 years

Question

Suppose you invest $300 at annual interest rate of 4.5% compounded continuously.
How much will you have in the account after 7.5 years?

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Ximena 9 mins 2021-09-13T12:04:39+00:00 1 Answer 0

Answers ( )

    0
    2021-09-13T12:06:04+00:00

    Answer:

    \$420.43  

    Step-by-step explanation:

    we know that

    The formula to calculate continuously compounded interest is equal to

    A=P(e)^{rt}  

    where  

    A is the Final Investment Value  

    P is the Principal amount of money to be invested  

    r is the rate of interest in decimal  

    t is Number of Time Periods  

    e is the mathematical constant number

    we have  

    t=7.5\ years\\ P=\$300\\ r=0.045  

    substitute in the formula above  

    A=300(e)^{0.045*7.5}  

    A=\$420.43  

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