Question

A person places $127 in an investment account earning an annual rate of 4.2%, compounded continuously. Using the formula V = P e r t V=Pe rt , where V is the value of the account in t years, P is the principal initially invested, e is the base of a natural logarithm, and r is the rate of interest, determine the amount of money, to the nearest cent, in the account after 16 years.

Answer 1

Answer: 248.69

Explanation:

r= 4.2%

=0.042

r=4.2%=0.042

P= 127

P=127

t=16

t=16

V

=

P

e

r

t

V=Pe

rt

V

=

127

e

0.042

(

16

)

V=127e

0.042(16)

V

=

127

e

0.672

V=127e

0.672

V

=

248.685

≈

248.69

V=248.685≈248.69

Answer 2

Answer: $248.68

Explanation:

Given

Money compounded according to

`\Rightarrow V=Pe^(rt)\\`

Here, P=$127

r=4.2%

t=16 years

`\Rightarrow V=127e^(0.042* 16)\\\\\Rightarrow V=127e^(0.672)=127* 1.958\\\\\Rightarrow V=\$248.68`

Value after 16 years is $248.68