Question

NO LINKS!!! URGENT HELP PLEASE!!

1. If P dollars is deposited in a savings account that pays interest at a rate of r% per year compounded continuously, find the balance after t years. Round your answer to the nearest cent

P = 120
r = 2 1/2
t = 8

2. An investment of P dollars increased to A dollars in t years. If the interest was compounded continuously, find the interest rate. Round your answer to the nearest whole number

A = 4055
P = 1000
t = 20

______%

Answer 1

1: the balance after 8 years is approximately $151.78.

2: is approximately 7%.

Explanation:

1: The balance after t years with continuous compounding can be calculated using the formula:

B = Pe^(rt)

Where:

P = 120 dollars (initial deposit)

r = 2.5% = 0.025 (interest rate in decimal form)

t = 8 years

Substituting these values into the formula, we get:

B = 120e^(0.025*8) ≈ 151.78

Therefore, the balance after 8 years is approximately $151.78.

2: The interest rate can be found using the formula:

A = Pe^(rt)

Taking the natural logarithm of both sides and solving for r, we get:

r = ln(A/P) / t

Where:

A = 4055 dollars (final amount)

P = 1000 dollars (initial investment)

t = 20 years

Substituting these values into the formula, we get:

r = ln(4055/1000) / 20 ≈ 0.0774

Converting to a percentage and rounding to the nearest whole number, we get:

r ≈ 7%

Therefore, the interest rate, if compounded continuously, is approximately 7%.

Answer 2

1. $146.57

2. 7%.

Explanation:

1.

The formula for continuous compounding is:

A = Pe^(rt)

Where:

A = the balance after t years

P = the principal amount

r = the annual interest rate (expressed as a decimal)

t = the time in years

To use this formula, we first need to convert the annual interest rate to a decimal:

r = 2 1/2 = 2.5%

r = 2.5/100 = 0.025

Now we can plug in the values:

A = 120e^(0.025*8)

A ≈ $146.57

Therefore, the balance after 8 years is approximately $146.57

2.

The formula for continuous compounding is: A = Pe^(rt)

Where:

A = the balance after t years

P = the principal amount

r = the annual interest rate (expressed as a decimal)

t = the time in years

We can rearrange this formula to solve for the interest rate:

r = ln(A/P)/t

Where ln represents the natural logarithm.

Now we can plug in the given values:

r = ln(4055/1000)/20

r ≈ 0.069or 7.1%

Therefore, the interest rate, rounded to the nearest whole number, is 7%.