Andrew invested $3,100 in an account paying an interest rate of 2.1% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 16 years?

Question

Weber

Mathematics

28 June, 02:52

Andrew invested $3,100 in an account paying an interest rate of 2.1% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 16 years?

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Answers (1)

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Corky · Answer 1

Answer: $4338 would be in the account after 16 years.

Step-by-step explanation:

The formula for continuously compounded interest is

A = P x e (r x t)

Where

A represents the future value of the investment after t years.

P represents the present value or initial amount invested

r represents the interest rate

t represents the time in years for which the investment was made.

e is the mathematical constant approximated as 2.7183.

From the information given,

P = $3100

r = 2.1% = 2.1/100 = 0.021

t = 16 years

Therefore,

A = 3100 x 2.7183^ (0.021 x 16)

A = 3100 x 2.7183^ (0.336)

A = $4338 to the nearest dollar