Question

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Answer 1

Given:

You have $1000 to invest a year and have an account earning 4% compound continuously.

Required:

How much money will you have at the end of the year.

Step-by-step explanation:

We know the formula for continuously compound interest is

`P(t)=P_0e^(rt)`

Here,

`\begin{gathered} P(t)=\text{ Value at time t} \\ P_0=\text{ Original principal sum} \\ r=\text{ annual interest rate} \\ t=\text{ Length of time the interest is applied } \end{gathered}`

We have initial amount $1000, annual interest rate 4% and length of time 1 year

.

Now,

`\begin{gathered} P(t)=1000* e^(0.04*1) \\ P(t)=1040.81 \end{gathered}`

Answer:

So, $1040.81 money will have at the end of the year.