Answer:
(a) The future value after 9 years is $7142.49.
(b) The effective rate is .
(c) The time to reach $13,000 is 21.88 years.
Step-by-step explanation:
The definition of Continuous Compounding is
If a deposit of dollars is invested at a rate of interest
compounded continuously for
years, the compound amount is
(a) From the information given
Applying the above formula we get that
The future value after 9 years is $7142.49.
(b) The effective rate is given by
Therefore,
(c) To find the time to reach $13,000, we must solve the equation
