Question

Bethany borrows $8000 at 3% interest rate with interest compounded continuously for 6 years. What is the total interest?

Answer 1

$1,577.74

Explanation:

You are going to want to use the continuous compound interest formula, which is shown below.

`A = Pe^(rt)`

A = total

P = principal amount

r = interest rate (decimal)

t = time (years)

First change 3% to its decimal form:

3% ->
`(3)/(100)` -> 0.03

Next, we can plug in the values into the equation:

`A=8,000e^(0.03(6))`

`A=9,577.74`

The last step is to subtract 8,000 from 9,577.74:

`9,577.74-8,000=1,577.74`

The total interest earned is $1,577.74