Question

If $740 is invested at an interest rate of 11% per year and is compounded continuously, how much will the investment be worth in 7 years?

Use the continuous compound interest formula A = Pert.

Answer 1

D)1,598.23

Explanation:

Answer 2

`\$1,598.23`

Explanation:

we know that

The formula to calculate continuously compounded interest is equal to

`A=P(e)^(rt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

e is the mathematical constant number

we have

`t=7\ years\\ P=\$740\\ r=0.11`

substitute in the formula above

`A=\$740(e)^(0.11*7)`

`A=\$1,598.23`