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11 December, 20:38

Nancy borrows $5000 at a rate of 16% interest per year. What is the amount due at the end of 5 years if the interest is compounded continuously?

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  1. 11 December, 22:19
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    A = p (1 + r*t)

    A = Amount

    p = Principal (5000)

    r = rate (0.16)

    t = time (5)

    A = 5000 (1 + 0.16*5)

    A = 5000 (1 + 0.8)

    A = 5000 (1.8)

    A = 9000

    Therefore she will need to pay $9000 at the end of 5 years.
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