Question

Do not round any intermediate computation, and round your answer to the nearest cent.

Answer 1

$1,507.29

Explanation

Continuous compounding interest formula

`A=Pe^(rt)`

where,

• A: final amount, in dollars

,

• P: principal, in dollars

,

• r: annual interest rate, as a decimal

,

• t: time in years

Substituting P = $1,100, r = 0.045 (=4.5/100), and t = 7 years, we get:

`\begin{gathered} A=1,100* e^(0.045*7) \\ A=1,100* e^(0.315) \\ A=\text{ \$}1507.29 \end{gathered}`