Question

A person places $686 in an investment account earning an annual rate of 3.8%, compounded continuously. Using the formula V = Pe^{rt}V=Pe rt , where V is the value of the account in t years, P is the principal initially invested, e is the base of a natural logarithm, and r is the rate of interest, determine the amount of money, to the nearest cent, in the account after 15 years.

Answer 1

Answer:

V = $1213.03

Step-by-step explanation:

We can determine the amount of money after 15 years with the given formula:

$V = Pe^{rt}$   (1)

Where:

V: is the value of the account in t years =?

P: is the principal initially invested = $686                

r: is the rate of interest = 3.8% = 3.8/100 = 0.038

t: is the time = 15 years

By substituting the above values into equation (1) we have:

$V = Pe^{rt} = 686*e^{(0.038*15)} = 1213.03$  

               

Therefore, the amount of money is $1213.03.

I hope it helps you!