Question

A

a
1) Jimmy invests $8,540 in a retirement
account with a fixed annual interest rate of
6.03% compounded continuously. What
will the account balance be after 14 years?
A) $16,422.64 B) $19,865.03
C) $18,522.03 D) $17,525.57

Answer 1

B) $19,865.03

Explanation:

Continuous Compounding Formula

`\large \text{$ \sf A=Pe^(rt) $}`

where:

• A = Final amount
• P = Principal amount
• r = annual interest rate (in decimal form)
• t = time (in years)

Given:

• P = $8,540
• r = 6.03% = 0.0603
• t = 14 years

Substituting given values into the formula and solving for A:

`\large \implies \text{$ \sf 8540e^(0.0603 * 14)=19865.03215 $}`