Question

Maria invests $6,154 in a savings account with a fixed interest rate of 8% compounded continuously. What will the account balance be after 10 years?

Answer 1

Answer:

$13,695.98

Step-by-step explanation:

We can use the continuous compound interest formula to solve:

$A = Pe^{rt}$

P = principal amount

r = interest rate (decimal)

t = time (years)

First, lets change 8% into a decimal:

8% -> $\frac{8}{100}$ -> 0.08

Now, lets plug in the values:

$A=6,154e^{0.08(10)}$

$A=13,695.98$

The account balance after 10 years will be $13,695.98