Question

A principal amount of $600 is placed in a savings account with an annual interest rate of 1.5% compounded continuously. How much interest is earned after 10 years? $9.07 $97.10 $609.07 $697.10

Answer 1

To find the amount of interest earned after 10 years with continuous compounding, we can use the formula A = P * e^(rt). Plugging in the values from the question, the amount of interest earned after 10 years is approximately $609.07.

Step-by-step explanation:

To find the amount of interest earned after 10 years with continuous compounding, we can use the formula:

A = P * e^(rt)

Where:

• A is the final amount
• P is the principal amount
• e is the mathematical constant approximately equal to 2.71828
• r is the interest rate
• t is the time in years

Plugging in the values from the question:

A = $600 * e^(0.015 * 10)

A = $600 * e^(0.15)

A ≈ $609.07

Therefore, the amount of interest earned after 10 years is approximately $609.07.