Question

Jay borrows $8,000 at a rate of 1.9% interest per year. What is the amount due at the end of 6 years if the interest is compounded continuously?

$8,965.21
$10,027.21
$8,966.02
$25,014.15


Pleeeease show your work on how you solved it because I keep getting 8,962.90 which isn't an option and last time I asked this question, no one explained how to solve it

Answer 1

$8,966.02

Explanation:

Amount = 8000 × e^(6 × 1.9/100)

Amount = 8000 × e^0.114

Amount = 8966.016999

Answer 2

Interest formula: A = Pe^rt

A = amount

P = principal amount

r = interest rate

t = time

We know that in the question we have:

P = 8,000

r = 0.019

t = 6

Now, solve with the given values:

A = 8000e^(0.019*6)

A = 8000e^(0.114)

A = 8966.016...

Round to the nearest hundredth:

8966.016... → 8,966.02

Therefore, the answer is [ $8,966.02 ]

Best of Luck!