Question

Maria invests $6,154 in a savings account with a fixed annual interest rate of 8% compounded continuously. What will the account balance be after 10 years?

Answer 1

Answer:

$13,695.98

Step-by-step explanation:

Continuously compounded interest formula:

$A = Pe^{rt}$

where

A = future value

P = principal (present value of amount invested)

e = mathematical constant, the base of natural logarithms

r = interest rate

t = time in years

We have: P = 6154; r = 8% = 0.08; t = 10

$A = 6154e^{0.08 \times 10}$

$A = 6154e^{0.8}$

$A = 6154 \times 2.2255$

$A = 13695.98$

Answer: $13,695.98