Question

Aaron invested $7,500 in an account paying an interest rate of 1.5% compounded

continuously. Assuming no deposits or withdrawals are made, how much money, to
the nearest hundred dollars, would be in the account after 8 years?

Answer 1

8500

Explanation:

When compounded continuously the future value, FV , of your initial investment, PV , is determined with the the equation

`FW = PV` ×
`e^(rxt)`

where r is the norminal interest rate, expressed as a decimal, and t is the investment period in years.

Plugin the values in this equation gives

`FW = $7,500` ×
`e^(0.015x8) =$8,456.23`

Round to nearest hundred dollars = 8500