Question

A person places $4760 in an investment account earning an annual rate of 1.6%, compounded continuously. Using the formula V=PertV = Pe^{rt}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 7 years.

Answer 1

$5324.12

Explanation:

Given that the principal p= $4760

rate r= 1.6% 1.6/100 =0.016

time t= 7years

by applying the expression

`V = Pe^(rt)`

We have

`V = 4760e^(0.016*7)\\\\ V=4760e^(0.112)\\\\ V=4760*1.11851286065\\\\ V=$5324.12`

Hence after 7 years the money in the account will be $5324.12