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22. Kaitlyn invests $3,000 in a savings account that

pays an annual interest rate of 4.08%; how
much will she have after four years if there is
continuous compounding?
[A] $3,532.18
[B] $3,489.60
[C] $4,323.65
[D] $2,052.91
[E] $4,271.25

1 Answer

1 vote

To calculate how much Kaitlyn will have after four years with continuous compounding, we can use the following formula:

A = P * e^(r*t)

where A is the final amount, P is the initial principal (in this case, $3,000), r is the annual interest rate (4.08%), and t is the number of years (4). Plugging these values into the formula, we get:

A = $3,000 * e^(0.0408*4)

= $3,000 * e^0.1632

= $3,000 * 1.1759

= $3,527.77

Therefore, Kaitlyn will have $3,527.77 after four years with continuous compounding, which is close to [A] $3,532.18.

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