Question

sid is going to invest $4000 for 3 years. How much will he have in 3 years if it it’s interest rate is 81/4% compounded continuously?

Answer 1

The amount invested is called the principal.

Principal = $4,000

The time = 3 years

The rate = 8 1/4% compounded continuosly

`\begin{gathered} A=P(1+r)^t \\ \text{Where A=amount after time t} \\ P=\text{ principal} \\ r=\text{rate} \\ t=\text{time} \end{gathered}`
`\begin{gathered} A=\text{ \$4000(1+}(33)/(400))^3 \\ A=\text{ \$4000(1.0825})^3 \\ A=\text{ \$4000(1}.2685) \\ A=\text{ \$5,}073.92 \end{gathered}`

The amount Sid is going to have after 3years is $5,073.92