Question

Suppose you invest 1600 at annual interest rate of 7.9% compounded cont how much will u have after 10yrs

Answer 1

Answer:

B. $3525.43

Step-by-step explanation:  

We will use continuously compound interest formula to solve our problem.

$A=P*e^{rT}$      

A= Amount after T years.

P= Principal amount.

r= Interest rate (in decimal form).

e= The mathematical constant e.

T= Time in years.

First of all we will convert our interest rate in decimal form.

$7.9\text{ Percent}=\frac{7.9}{100}=0.079$

Now let us substitute our given values in above formula.

$A=1600*e^{0.079*10}$

$A=1600*e^{0.79}$

$A=1600*2.2033964262559365$

$A=3525.4342820094984\approx 3525.43$

Therefore, we will get an amount of $3525.43 after 10 years and option B is the correct choice.