193k views
5 votes
You deposit $800 in an account that pays 5.7% annual compounded continuously. How much will you have after 13 years?

A. $2000.45
B. $1267.32
C. $1678.92
D. $1089.23

1 Answer

4 votes

Final answer:

After 13 years in an account with a 5.7% annual interest rate compounded continuously, you would have approximately $1678.92, option C, using the continuous compounding formula A = Pe^(rt) with principal $800, rate 0.057, and time 13 years.

Step-by-step explanation:

To calculate the amount of money you will have after 13 years in an account that pays 5.7% annual interest compounded continuously, you can use the formula for continuous compounding, which is A = Pe^(rt). Here, A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial amount of money), r is the annual interest rate (in decimal), and t is the time the money is invested for in years.

The principal amount (P) is $800, the interest rate (r) is 5.7% or 0.057 in decimal form, and the time (t) is 13 years. Plugging these values into the formula, we get:

A = $800 e^(0.057 × 13)

Now we calculate the exponent:

A = $800 e^(0.741)

Next, we calculate e raised to the power of 0.741, which is approximately 2.098:

A = $800 × 2.098

And finally we find A:

A = $1678.92

Therefore, after 13 years, you will have approximately $1678.92, which corresponds to option C.

User Matthew Brett
by
9.4k points