Question

Eva invests $8100 in a new savings account which earns 4.5%

annual interest, compounded continuously. What will be the value of
her investment after 2 years? Round to the nearest cent.

Answer 1

The formula for continuously compounded interest is A = Pe^(rt), where A is the amount, P is the principal, e is the natural logarithm base, r is the interest rate, and t is the time in years.

In this case, P = $8100, r = 4.5%, and t = 2 years. Plugging these values into the formula, we get:

A = 8100*e^(0.045*2)
A = 8100*e^(0.09)
A = $9318.35

Therefore, the value of Eva's investment after 2 years will be $9318.35.