If you invest $12,000 at 9% interest compounded continuously, what is the average amount in your account over one year Round your answer to the nearest cent.
A)$12,556.57
B) $12,460.54
C) $12,844.66
D) $12,652.60
E) $12,748.63

Question

If you invest $12,000 at 9% interest compounded continuously, what is the average amount in your account over one year  Round your answer to the nearest cent. 
A)$12,556.57
B) $12,460.54
C) $12,844.66
D) $12,652.60
E) $12,748.63

Quizplus · Accepted Answer

The average amount in the account over one year is the average of the initial amount and the final amount. The final amount is $12,000 * e^(0.09 * 1) = $12,960.54. The average amount is ($12,000 + $12,960.54) / 2 = $12,480.27. Rounded to the nearest cent, the answer is $12,480.27, which is closest to choice A, $12,556.57.

If You Invest $12,000 at 9% Interest Compounded Continuously, What