Question

A person places $80100 in an investment account earning an annual rate of 6.3%, compounded continuously. Using the formula V, equals, P, e, start superscript, r, t, end superscriptV=Pe
rt
, where V is the value of the account in t years, P is the principal initially invested, e is the base of a natural logarithm, and r is the rate of interest, determine the amount of money, to the nearest cent, in the account after 7 years.

Answer 1

Answer:

To calculate the amount of money in the account after 7 years with continuous compounding, you can use the formula V = P \e^{rt}:

V = 80100 \ e^0.063 7

Calculating this expression:

V approximately 80100 e^{0.441}

V approximately 80100 = 1.554975

V approximately 124515.675

So, after 7 years, the amount of money in the account is approximately $124515.68 (rounded to the nearest cent).