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30 March, 02:43

Steve invests 1,800 in an account that earns 3.7% annual interest, compounded continuously. What is the value of the account after 10 years? Round your answer to the nearest dollar.

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  1. 30 March, 03:10
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    Answer: the value of the account after 10 years is $2606

    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 = 1800

    r = 3.7% = 3.7/100 = 0.037

    t = 10 years

    Therefore,

    A = 1800 x 2.7183^ (0.037 x 10)

    A = 1800 x 2.7183^ (0.37)

    A = $2606 to the nearest dollar
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