Question

Bethany borrows $8000 at 3% interest rate with interest compounded continuously for 6 years. What is the total interest?

Answer 1

Answer:

$1,577.74

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 3% to its decimal form:

3% -> $\frac{3}{100}$ -> 0.03

Next, we can plug in the values into the equation:

$A=8,000e^{0.03(6)}$

$A=9,577.74$

The last step is to subtract 8,000 from 9,577.74:

$9,577.74-8,000=1,577.74$

The total interest earned is $1,577.74