Question

Edgar accumulated $9,000 in credit card debt. If the interest rate is 30% per year and he does not make any

payments for 2 years, how much will he owe on this debt in 2 years by compounding continuously?

Answer 1

• $16399.06

Explanation:

Given

• Debt amount P = $9000
• Interest rate r = 30% = 0.3
• Time t = 2 years
• Compound number = continuous

Use formula

• A = Pe^(rt)
• A = 9000*e^(0.3*2) = $16399.06