Question

What is the value of $750 invested into an account with an annual rate of 3.25% compounded continuously for 4 years and 3 months?

Answer 1

Answer:

$861.09

Step-by-step explanation:

You are going to want to use the compound interest formula, which is shown below.

$A = Pe^{rt}$

A = total

P = principal amount

r = interest rate (decimal)

t = time (years)

First, change 3.25% into its decimal form:

3.25% -> $\frac{3.25}{100}$ -> 0.0325

Next for t, we can use 4.25 since 4 years and 3 months is 4.25 in its decimal form. Now lets plug in the values:

$A=750e^{(0.0325)4.25}$

$A=861.09$

Your answer is $861.09