Question

A person places $531 in an investment account earning an annual rate of 6.1%, compounded continuously. Using the formula V = Pert, where V is the value of the account in t years, P is the principal initially invested, e is the base of a natural logarithm, and r is the rate of interest, determine the amount of money, to the nearest cent, in the account after 16 years.

A. $1,200.04
B. $1,537.98
C. $1,689.25
D. $1,832.11

Answer 1

The amount of money in the account after 16 years is approximately $1,410.24.

Step-by-step explanation:

To find the amount of money in the investment account after 16 years, we can use the formula V = Pert. In this case, P = $531, r = 0.061 (6.1% expressed as a decimal), and t = 16. Upon entering these values into the formula, we get:

V = 531 * e^(0.061 * 16)

V ≈ 531 * e^(0.976)

V ≈ 531 * 2.656

V ≈ $1,410.24

Therefore, the amount of money in the account after 16 years is approximately $1,410.24, so the correct answer is C. $1,689.25.