Question

Paige borrows $4000 at a rate of 12% interest per year. What is the amount due at the end of 3 years if the interest is compounded continuously?

Answer 1

F=Pe^(rt)

F=4000e^(.12*3)

F=4000e^(.36)

F=$5733.32

Answer 2

Answer: The amount due at the end of 3 years is approximately $ 5733.318.

Explanation:

Since, the amount which is compounded continuously for t years is,

`A=Pe^(rt)`

Where, P is the principal amount,

r = Rate of interest,

Here, P = $ 4000, r = 12% = 0.12, t = 3 years,

Hence, the amount due at the end of 3 years if the interest is compounded continuously,

`A = 4000 e^(0.12* 3)`

`=4000* e^(0.36)`

`=4000* 1.43332941456=5733.31765824\approx 5733.318`

Hence, the amount after 3 years will be approximately $ 5733.318.