How much interest will be earned in an account into which $1,000 is deposited for one year with continuous compounding at a 13 percent rate? A)$130.00 B)$138.83 C)$169.00 D)$353.34 1000 (e.¹³) = 1000 x 1.1388 = $1,138.83

Question

Quizplus · Accepted Answer

The formula for continuous compounding is A = Pe^(rt), where A is the ending amount, P is the principal, e is Euler's number (approximately 2.71828), r is the interest rate, and t is the time in years. Plugging in the values, we get A = 1000e^(0.13*1) = $1138.83. The interest earned would be $1138.83 - $1000 = $138.83. Therefore, the best choice is B.

How Much Interest Will Be Earned in an Account into Which