Question

Do not round any intermediate computation, and round your answer to the nearest cent.

Answer 1

Answer

$1,507.29

Step-by-step explanation

Continuous compounding interest formula

$A=Pe^{rt}$

where,

• A: final amount, in dollars

,

• P: principal, in dollars

,

• r: annual interest rate, as a decimal

,

• t: time in years

Substituting P = $1,100, r = 0.045 (=4.5/100), and t = 7 years, we get:

$\begin{gathered} A=1,100\times e^{0.045\times7} \\ A=1,100\times e^{0.315} \\ A=\text{ \ }1507.29 \end{gathered}$