Question

Tara placed $1200 in a savings account which compounds interest continuously at a rate of 1.4%.


How much will she have in the account after 3 years?

Round your answer to the nearest dollar.

Do NOT round until you have calculated the final answer.

Answer 1

Answer:

$1,251

Step-by-step explanation:

Formula: $A = P(1 + \frac{r}{n})^{nt}$

A = final amount

P = initial principal balance

r = interest rate

n = number of times interest applied per time period

t = number of time periods elapsed

Plug the values into the formula; solve:

$r = \frac{r}{100}$

$r = \frac{1.4}{100}$

$r = 0.014$

0.014 rate per year

$A = Pe^{rt}$

$A = 1,200.00^{(2.71828)}^{(0.014)(3)}$

$A = 1,251.47$

1,251.47 is 1251 rounded because the first value after the decimal point is not greater or equal to 5.