Question

Connor borrows $8,000 at a rate of 19% interest per year. What is the amount due at the end of 7 years if the interest is compounded continuously?
$14,576.95
$29,215.37
$30,248.35
$43,791.58

Which one is it and how did you get it?

Answer 1

Answer:

$\ 30,248.35$  

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 Amount due  

P is the amount of money borrowed

r is the rate of interest in decimal  

t is Number of Time Periods  

e is the mathematical constant number

we have  

$t=7\ years\\ P=\ 8,000\\ r=19\%=19/100=0.19$  

substitute in the formula above  

$A=8,000(e)^{0.19*7}$  

$A=8,000(e)^{1.33}$  

$A=\ 30,248.35$