Answer: Profit = $941.6
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 = $4500
r = 3.8% = 3.8/100 = 0.038
t = 5 years
Therefore,
A = 4500 x 2.7183^(0.038 x 5)
A = 4500 x 2.7183^(0.19)
A = $5441.6
the profit from the investment after 5 years is
5441.6 - 4500 = $941.6
