Question

A person places $72300 in an investment account earning an annual rate of 7.1%, compounded continuously. Using the formula V = Pe^rt, where V is the value of the account in t years, P is the principal initially invested, e is the base of a natural logarithm, and r is the rate of interest, determine the amount of money, to the nearest cent, in the account after 19 years.

Answer 1

Explanation:

Our P is 72300; our r is .071, e is Euler's number (a constant) and t is 19 years. Filling in:

`V=72300e^((.071)(19))` and

`V=72300e^{1.349` and

V = 72300(3.853570033) so

V = $278,613.11