Question

Given P = $6345, r=9.3%compounded continuously and t=8years. Use the correct compound interest formula to calculate to the nearest cent the value of A

Answer 1

Given,

P=$6345

r=9.3%

t=8 years

The formula for finding A is,

$A=P(1+\frac{r}{100})^t$

Now, substituting the given values into the above formula.

$\begin{gathered} A=P(1+\frac{r}{100})^t \\ =6345(1+\frac{9.3}{100})^8 \\ =6345(1+0.093)^8 \\ =6345(2.037) \\ =12,923.9 \end{gathered}$

So, the value of A is $12,923.9