Question

Maria invests $6,154 in a savings account with a fixed interest rate of 8% compounded continuously. What will the account balance be after 10 years?

Answer 1

$13,695.98

Explanation:

We can use the continuous compound interest formula to solve:

`A = Pe^(rt)`

P = principal amount

r = interest rate (decimal)

t = time (years)

First, lets change 8% into a decimal:

8% ->
`(8)/(100)` -> 0.08

Now, lets plug in the values:

`A=6,154e^(0.08(10))`

`A=13,695.98`

The account balance after 10 years will be $13,695.98