Complete Question
If $12000 is invested in an account in which the interest earned is continuously compounded at a rate of 2.5% for 3 years
Answer:
$ 12,934.61
Step-by-step explanation:
The formula for Compound Interest Compounded continuously is given as:
A = Pe^rt
A = Amount after t years
r = Interest rate = 2.5%
t = Time after t years = 3
P = Principal = Initial amount invested = $12,000
First, convert R percent to r a decimal
r = R/100
r = 2.5%/100
r = 0.025 per year,
Then, solve our equation for A
A = Pe^rt
A = 12,000 × e^(0.025 × 3)
A = $ 12,934.61
The total amount from compound interest on an original principal of $12,000.00 at a rate of 2.5% per year compounded continuously over 3 years is $ 12,934.61.
