Question

Cynthia invested $12,000 in a savings account. If the interest rate is 6%, how much will be in the account in 10 years by compounding continuously? Round to the nearest cent.

Answer 1

21,865.43

previous answer left out the last digit

Explanation:

Answer 2

In 10 years she'll have approximately $21865.4 in her account.

Explanation:

When an amount is compounded continuously its value over time is given by the following expression:

`v(t) = v(0)*e^(rt)`

Applying data from the problem gives us:

`v(10) = 12000*e^((0.06*10))\\v(10) = 12000*e^(0.6)\\v(10) = 21865.4`

In 10 years she'll have approximately $21865.4 in her account.