Question

April invested $7500 into a continuously compounded account with an interest rate of 2.7% for 2 years. How much money was in the account after that time?
Round your answer to the nearest dollar.

Answer 1

Answer:

7980

Step-by-step explanation:

Use the formula for calculating compound interest A=P0ert where P0=7500, r=0.031, and t=2. Substitute the values into the formula and simplify.

A=7500e0.031⋅2

A=7500e0.062

A=7500(1.063...)

A=7979.72

To the nearest dollar, the balance of the account is A≈7980 after two years.

Answer 2

Answer:

The final balance is $7,913 and the total compound interest is $413.27

To calculate compound intrest, you need to multiply the initial principal amount ($7500) by one , plus the annual intrest rate (2.7%) raised to the number of compound periods minus one. The total initial amount of the loan is the subtracted from the resulting value.