Question

If $190 is invested at an interest rate of 11% per year and is compounded continuously, how much will the investment be worth in 4 years? Use the continuous compound interest formula: A = Pert

Answer 1

Answer:

$295.01

Step-by-step explanation:

Using the compounding continuously formula, we are looking for A.  We have that P = 190; r = .11 (always use the decimal form of the rate!); and t = 4.  Filling in we have:

$A=190e^{(.11)(4)}$

Simplifying that multiplication:

$A=190e^{.44}$.

On your calculator, raise e to the .44 power to get

A = 190(1.552707219) and

A = $295.01

Answer 2

The investment should be worth in 4 years is $295.01.

Given that,

• If $190 is invested at an interest rate of 11% per year and there is 4 years.

Based on the above information, the calculation is as follows:

$A = 190e^{0.11 \times 4}\\\\= 190e^{-44}\\\\= 190\times 1.55$

= $295.01

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