Nancy invested $1800 at an interest rate of 6% for 4 years, where it was compounded continuously. If A = Peni, calculate the accumulated amount.
A)$2,288.25
B)$4,576.50
C)$18,305.99
D)$9,152.99

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. Given $P = $1800$, $r = 6\% = 0.06$, and $t = 4$ years, we calculate $A = 1800e^{0.06*4}$. This calculation results in $A ≈ $2288.25$.

Nancy Invested $1800 at an Interest Rate of 6% for 4