Question

A person places $736 in an investment account earning an annual rate of 1.3%,

compounded continuously. Using the formula V = Pert, where V is the value of the
account in t years, P is the principal initially invested, e is the base of a natural
logarithm, and r is the rate of interest, determine the amount of money, to the nearest
cent, in the account after 2 years.

Answer 1

$755.39

Explanation:

Put the numbers in the formula and do the arithmetic.

V = P·e^(rt)

V = $736·e^(0.013·2) ≈ $755.39

The amount in the account after 2 years is $755.39.