How much would $700 be worth after 8 years, if it were invested at 5%interest compounded continuously? (Use the formula below and round youranswer to the nearest cent.)A(t) = Po…

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asked Mar 7, 2023 210k views

1 Answer

Sgowd · Answer 1 · 2023-03-11T11:04:14+0000

$B)\:\operatorname{\$}1044.28$

1) Since this investment will be done at a 5% interest rate compounded continuously, we can write the following:

$\begin{gathered} A(t)=P_0e^(rt) \\ \\ A(8)=700e^(0.05*8) \\ \\ A(8)=700e^(0.4) \\ \\ A(8)\approx1044.28 \end{gathered}$

2) So, we can tell that given there will not be withdrawals or another investment in this account, after 8 years the future value is:

$\$1044.28$

Thus, the answer is B.