Question

Charles owes $2,500 on a credit card. The card charges 12% interest compounded continuously. Write a formula that describes how much Charles will owe on his card after t years assuming that he makes no payments that does not occur in any additional charges.

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Answer 1

see below

Explanation:

The formula for the amount resulting from P earning interest at rate r continuously compounded is ...

A = Pe^(rt)

for P=2500 and r=0.12, this becomes ...

A = 2500e^(0.12t)