Question

Mary invests $1.200 in an account that earns 6% annual interest, compounded continuously. What is the value of the account after 7 years? Round your answer to the nearest dollar

Answer 1

$1,826

Explanation:

Given that

The amount invested is $1,200

The annual rate of interest is 6%

And, the time period is 7

We need to find the value of the account after 7 years in the case of compounded continuously

We know that for compounded continuously, the following formula should be used

= Amount invested ×e^(rate, time)

= $1,200 × e^(0.06 ×7)

= $1,200 × e^0.42

= $1,826