Question

Jamie invests $1,200 in an account that earns 3% interest. Assuming continuous compounding, how much is in his account after 7 years?

Answer 1

Answer:

The amount in account after 7 years of investment is $1478.4

Step-by-step explanation:

Given as :

The principal invested in account by Jamie = p = $1200

The rate of interest = r = 3% compounded annually

The Time period of investment = t=  7 years

Let The Amount in Jamie account = $ A

For continuous compounding

Amount = Principal × $e^{r \times time}$

Or, A = p × $e^{r \times time}$

Or, A = $1200 × $e^{0.03 \times 7}$

Or, A = $1200 × $2.71^{0.03 \times 7}$

Or, A = $1200 × 1.232

∴  A = $1478.4

So, The amount after continuous compounding = A = $1478.4

Hence , The amount in account after 7 years of investment is $1478.4    Answer