Question

If $1120 is invested at an interest rate of 15% per year and is compounded continuously, how much will the investment be worth in 7 years? Use the continuous
compound interest formula

Answer 1

Answer:

$3,200.57

Step-by-step explanation:

You are going to want to use the continuous compound interest formula, which is shown below.

$A = Pe^{rt}$

A = total

P = principal amount

r = interest rate (decimal)

t = time (years)

First change 15% to its decimal form:

15% -> $\frac{15}{100}$ -> 0.15

Next, plug in the values into the equation:

$A=1,120e^{0.15(7)}$

$A=3,200.57$

The investment will be worth $3,200.57 in 7 years.