Question

The formula to determine continuously compounded interest is A = Pe^rt, where A is the amount of

Answer 1

Answer:

$A=18000 \cdot e^{0.0125 \cdot 2}$

$A=18455.67$ (Approximated)

Step-by-step explanation:

$A=Pe^{rt}$

We are given the following along with the equation we are to use:

$P=18000$

$r=1.25\%=\frac{1.25}{100}=0.0125$

Be careful it says $t$ is in years and it gives us a time that is in months.

$12 \text{months}=1 \text{ year}$:

$t=\frac{24}{12}=2$

Let's plug in our information:

$A=18000 \cdot e^{0.0125 \cdot 2}$

Plugging in the right hand side into my calculator gives:

$A=18455.67$ (Approximated)