Question

You invest $1,200 in an account that pays an interest rate of 7.25%, compounded continuously.

Answer 1

The answer is $1,809.00.

Explanation:

To calculate interest rate, you must multiply the decimal version of the percentage by the original number. 7.25% as a decimal is equivalent to 0.0725, so multiplying that by 1,200 = 87. Now we must multiply that by 7 to find the amount after 7 years. The product is 609, or $609. Now we add that amount to the original number (1,200). The sum is 1809, $1,809. Therefore, your total balance after 7 years is $1,809.

Hope I helped and good luck!

Answer 2

Compounded would equal $1,958.67