Question

Eva invests $6400 in a new savings account which earns 3.3 % annual interest, compounded continuously. What will be the value of her investment after 6 years? Round to the nearest cent

Answer 1

The value of her investment will be $7,801.36 after 6 years.

Explanation:

We are given the following in the question:

P = $6400

r = 3.3% = 0.033

t = 6 years

Formula for compound interest:

`A = pe^(rt)`

where A is the amount, p is the principal, r is the interest rate, t is the time in years when compounded continuously .

Putting values, we get,

`A = 6400e^(6* 0.033)\\A = \$7,801.36`

Thus, the value of her investment will be $7,801.36 after 6 years.