Question

what is the total investment of $2150 invested at 5.3% for 16 years and compounded continuously?

$5,968.93
$6,000.00
$5,152.68
$5,020.19

Answer 1

Answer:

The total investment is $5020.19

Step-by-step explanation:

Given : $2150 invested at 5.3% for 16 years and compounded continuously

To find : What is the total investment?

Solution :

The formula of continuously compounded interest is

$A = Pe^{rt}$

Where A = amount invested

P = principal = $2150

e = Euler's number (on calculator)

r = interest rate as decimal = 5.3%=0.053

t = time in years = 16 years

Substitute the value in the formula,

$A = Pe^{rt}$

$A = 2150\times e^{0.053\times 16}$

$A = 2150\times e^{0.848}$

$A = 2150\times 2.3349$

$A = 5020.19$

Therefore, Option 4 is correct.

The total investment is $5020.19.