Solve the problem.
-If $7000 is invested at 8% compounded continuously, determine the balance in the account after 3 years.
A) $8898.74
B) $8817.98
C) $8680.00
D) $8998.74

Question

Quizplus · Accepted Answer

The formula for continuous compounding is $A = Pe^{rt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), and $t$ is the time the money is invested for in years. Plugging in the given values: $A = 7000e^{0.08*3}$, we get $A = 7000e^{0.24}$, which calculates to approximately $8898.74.

Solve the Problem. -If $7000 Is Invested at 8% Compounded Continuously, Determine the Continuously