Question

Jason plans to invest $9,000 in an account at Union Bank. The annual rate is 3.78% compounded continuously. How much does Jason have at the end of 10 years?

Answer 1

Answer: he would have $13134 at the end of 10 years

Step-by-step explanation:

The formula for continuously compounded interest is

A = P x e (r x t)

Where

A represents the future value of the investment after t years.

P represents the present value or initial amount invested

r represents the interest rate

t represents the time in years for which the investment was made.

e is the mathematical constant approximated as 2.7183.

From the information given,

P = $9000

r = 3.79% = 3.78/100 = 0.0378

t = 10 years

Therefore,

A = 9000 x 2.7183^(0.0378 x 10)

A = 9000 x 2.7183^(0.378)

A = $13134 to the nearest dollar