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19 June, 02:43

16. Suppose you decided to place $2,500 in a savings account at First Foremost Savings and Loan. If the account pays 7% compounded continuously, how much money will you have in the account after 15 years

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  1. 19 June, 02:45
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    Final Value = $7,144.13

    Explanation:

    Giving the following information:

    Suppose you decided to place $2,500 in a savings account at First Foremost Savings and Loan. The account pays 7% compounded continuously.

    Number of years = 15

    Because it is compound continuously, we need to use the mathematical constant e.

    To calculate the final value, we need to use the following formula:

    FV = PV*[e^ (i*n) ]

    FV = 2,500*[e^ (0.07*15) ]

    FV = 2,500 * (e^1.05)

    FV = $7,144.13
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