$1250 is deposited in an account that pays 6.5% annual interest, compounded continuously. What is the balance after 8 year

Question

$1250 is deposited in an account
that pays 6.5% annual interest,
compounded continuously. What
is the balance after 8 years?

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Ruby 3 weeks 2021-11-10T05:31:08+00:00 1 Answer 0 views 0

Answers ( )

    0
    2021-11-10T05:32:38+00:00

    Answer: the balance after 8 years is

    $2103

    Step-by-step explanation:

    The formula for continuously compounded interest is

    A = P x e (r x t)

    Where

    A represents the future value of the investment after t years.

    P represents the present value or initial amount invested

    r represents the interest rate

    t represents the time in years for which the investment was made.

    e is the mathematical constant approximated as 2.7183.

    From the information given,

    P = 1250

    r = 6.5% = 6.5/100 = 0.065

    t = 8 years

    Therefore,

    A = 1250 x 2.7183^(0.065 x 8)

    A = 1250 x 2.7183^(0.52)

    A = $2103 to the nearest dollar

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