Question

If $190 is invested at an interest rate of 11% per year and is compounded continuously, how much will the investment be worth in 4 years? Use the continuous compound interest formula: A = Pert

Answer 1

Answer:

$295.01

Step-by-step explanation:

Using the compounding continuously formula, we are looking for A.  We have that P = 190; r = .11 (always use the decimal form of the rate!); and t = 4.  Filling in we have:

$A=190e^{(.11)(4)}$

Simplifying that multiplication:

$A=190e^{.44}$.

On your calculator, raise e to the .44 power to get

A = 190(1.552707219) and

A = $295.01