Answer:
(a) 3 years FV=$4,221.80
(b) 6 years FV=$5,092.46
(c) 9 years FV=$6,142.69
Step-by-step explanation:
The formula for continuously compounded interest is
FV = PV x e^(i x t)
where,
FV=future value of the investment,
PV= present value,
i = stated interest rate,
t = time in years,
e= mathematical constant approximated as 2.7183.
In this case,
PV=$3,500
i = 6.25%
(a) 3 years
FV = PV x e^(i x t)
FV = $3,500 x e^(6.25%x3)
FV=$4,221.80
(b) 6 years
FV = $3,500 x e^(6.25%x6)
FV=$5,092.46
(c) 9 years
FV = $3,500 x e^(6.25%x9)
FV=$6,142.69