Question

if $625 is invested at an interest rate of 7% per year and is compounded continuously,how much will the investment be worth in 12 years ?

Answer 1

$1447.73

Explanation:

Use the equation A = Pe^rt

P = starting amount

r = rate

t = time

A = 625e^0.07 * 12

A = 1447.73

Answer 2

It will be worth approximately $ 1447.73.

Explanation:

Since, the amount formula in compounded continuously,

`A=Pe^(rt)`

Where,

P is the principal amount,

r is the rate per period,

t is the number of periods,

e is Euclid number,

Here, P = $ 625,

r = 7% = 0.07,

t = 12 years,

Hence, the amount after 12 years would be,

`A=625 e^(0.07* 12)=625 e^(0.84)=\$ 1447.72936049\approx \$ 1447.73`