Question

A person places $103 in an investment account earning an annual rate of 1.9%, compounded continuously. Using the formula V = P e r t V=Pe rt , 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 6 years.

Answer 1

$115.36

Explanation:

Given data

P=$103

r=1.9%

t= 6 years

The expression for the amount is given as

`V = P e ^(r t)`

substitute

`V = 103*e^(0.019 *6)`

`V = 103*e^(0.114)\\\\V = 103*1.120\\\\V = 115.36\\\\`

Hence the final amount is $115.36