If $1,120 is invested at an interest rate of 15% per year and is compounded continuously, how much will the investment be worth in 7 years? Use the continuous compound interest formula: A = Pert.
Accepted Solution
A:
Answer:[tex]A=\$3,200.57[/tex] Step-by-step explanation:we know that
The formula to calculate continuously compounded interest is equal to
[tex]A=P(e)^{rt}[/tex] where A is the Final Investment Value P is the Principal amount of money to be invested r is the rate of interest in decimal t is Number of Time Periods e is the mathematical constant number
we have [tex]t=7\ years\\ P=\$1,120\\ r=0.15[/tex] substitute in the formula above [tex]A=\$1,120(e)^{0.15*7}[/tex] [tex]A=\$3,200.57[/tex]