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A total of $12,000 is invested at an annual interest rate of 3%. Find the balance after 4 years if

the interest is compounded continuously.
$13506.11
$12526.03
$13,529.96

User Narretz
by
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1 Answer

7 votes

The balance after 4 years if the interest is compounded continuously can be calculated using the formula for continuous compounding:

A = Pe^rt

where A is the balance after the period, P is the initial principal, r is the interest rate, and t is the time in years.

In this case, the initial principal is $12,000, the interest rate is 3%, and the time is 4 years.

A = 12000 * e^(0.03*4)

A = 12000 * e^0.12

A = 12000 * 1.128037

A = $13,529.96

User Bennett Keller
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7.8k points