Question

You invest $900 in an account that pays an interest rate of 5.5%, compounded continuously. calculate the balance of your account after 6 years. round your answer to the nearest hundredth

Answer 1

The balance is 1176.25 dollars

Answer 2

Answer:

$1251.87

Step-by-step explanation:

You invest $900 in an account that pays an interest rate 5.5%, compounded continuously. Calculate the balance of your account after 6 years.

In this question it is given that interest 5.5% is compounded continuously, it means your principal amount is constantly earning interest. We use the formula :

$A = Pe^{rt}$

Where A = Amount

           P = Principal amount ($900)

           e = Mathematical constant e

           r = rate of interest 5.5% ( 0.055)

           t = Time in years (6)

Now we put the values

$A=900(e)^{(0.055)(6)}$

$A=900(e)^{0.33}$

$A=900(2.718282^{0.33} )$

A = 900 × 1.390968

A = 1251.871316 rounded to $1251.87

The balance of your account after 6 years would be $1251.87.