Question

If $1,120 is invested at an interest rate of 15% per year and is compounded continuously, how much will the investment be worth in 7 years? Use the continuous compound interest formula: A = Pert.

$565.91
$1,131.82
$1,244.00
$3,200.57

Answer 1

Answer: $3,200.57

Explanation:

Given : Principal amount invested : P= $ 1,120

Rate of interest : r= 15% = 0.15

Time: t = 7 years

The continuous compound interest formula:-

`A = Pe^(rt)`

Substitute all the values in the formula , we get

`A = 1120e^(0.15*7)\\\\\Rightarrow\ A=1120 (2.85765111806)\\\\\Rightarrow\ A=3200.56925223\approx3200.57`

Hence, the compounded amount after 7 years = $3200.57

Answer 2

3200.57

Explanation:

Step 1: Write the data

Principal (P) = 1120

Rate (R) = 15%

Time = 7 years

Step 2: Write the formula

A = (Principal x e)^rate x time

Step 3: Apply the formula

A = Pe^rt

A = 1120e^0.15*7

A = 3200.57

Therefore, the investment will be worth $3200.57 in 7 years.

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