Question

If $315 is invested at an interest rate of 3% per year and is compounded continuously, how much will the investment be worth in 9 years? Use the continuous compound interest formula: A = Pert.
$206.23
$412.64
$2,343.56
$4,687.11

Answer 1

Answer:

$\ 412.64$

Step-by-step explanation:

we know that

The formula to calculate continuously compounded interest is equal to

$A=P(e)^{rt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest in decimal  

t is Number of Time Periods  

e is the mathematical constant number

we have  

$t=9\ years\\ P=\ 315\\ r=0.03$  

substitute in the formula above  

$A=\ 315(e)^{0.03*9}=\ 412.64$