Question

7. Find the amount of money accumulated if you invest $10,000 at 3% interest compounded continuously for 2 years. Round your

answer to the nearest cent.​

Answer 1

$10618.37

Explanation:

Use the formula for compound interest:

P(t) = P_0e^(rt)

You can look the formula up online to find what each variable represents.

First, our principal amount (P) is 10,000. Our interest rate (r) is 3% and our time (t) is 2. Substitute these into the equations in each variables' place. The equation will look like this:

P(t) = 10,000e^(0.03x2)

P(t) = 10,000e^(0.06)

Note that e is approximately 2.7183 .

Using your calculator, now simply find P(t).

You should get 10618.36972 as your answer. Round that to the nearest cent to get $10618.37 .