Question

You deposit $4200 in an account that pays 7.3% annual interest compounded continuously. How much will you have after three years?

Answer 1

$5228.16

Explanation:

Given data

Principal= $4200

Rate= 7.3%

Time= 3 years

The continuous compounding formula is given as

A= Pe^rt,

where e is the mathematical constant approximated as 2.7183.

Substitute

A= 4200*2.7183^(0.073*3)

A= 4200*2.7183^(0.219)

A= 4200*1.2448

A= $5228.16

Hence the value is $5228.16