Question

Tara placed $1200 in a savings account which compounds interest continuously at a rate of 1.4%.

How much will she have in the account after 3 years?

Round your answer to the nearest dollar.

Do NOT round until you have calculated the final answer.

Answer 1

1251

Explanation:

Answer 2

$1,251

Explanation:

Formula:
`A = P(1 + (r)/(n))^(nt)`

A = final amount

P = initial principal balance

r = interest rate

n = number of times interest applied per time period

t = number of time periods elapsed

Plug the values into the formula; solve:

`r = (r)/(100)`

`r = (1.4)/(100)`

`r = 0.014`

0.014 rate per year

`A = Pe^(rt)`

`A = 1,200.00^((2.71828))^((0.014)(3))`

`A = $1,251.47\\`

1,251.47 is 1251 rounded because the first value after the decimal point is not greater or equal to 5.