Question

If $125 is invested at an interest rate of 18% per year and is compounded continuously, how much will the investment be worth in 2 years? Use the continuous compound interest formula A = Pert.

Answer 1

C 179 is the answer.

Explanation:

Answer 2

$179.17

Explanation:

You already know the formula but you have it typed incorrectly. The rt is raised as a power to the e. Just in case you didn't know that. Filling in our formula with what we have gives us:

`A(t)=125e^{(.18)(2)`

Simplify that power to .36 and we have

`A(t)=125e^(.36)`

Now raise e to the power of .36 on your calculator and get

A(t)= 125(1.433329415) and

A(t) = $179.17