Question

Molly invests $8,858 in a retirement

account with a fixed annual interest rate of

5% compounded continuously. What will

the account balance be after 18 years?

A) $28,540. 41 B) $23,838. 95

C) $21,787. 16 D) $26,083. 97

Answer 1

(C.) $21.787.16

Explanation:

The formula for continuous compound interest is A(t) = Pe^rt, where P is the principal, r is the rate, and t is the time.

Thus, we have:

`A(t)=8858e^(0.05*18)\\A(t)=21787.16436=21787.16`