Question

Aaron invested $7,500 in an account paying an interest rate of 1.5% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest hundred dollars, would be in the account after 8 years?

Answer 1

The formula for calculating the amount of money in an account with continuous compounding is:

A = Pe^(rt)

Where:

A = the amount of money in the account after t years

P = the principal amount (initial investment)

r = the annual interest rate (as a decimal)

t = the time (in years)

Substituting the given values into the formula, we get:

A = 7500e^(0.0158)

A ≈ $9,071.21

Therefore, to the nearest hundred dollars, there would be $9,100 in the account after 8 years.

Explanation: