Problem

If $\$ 9000$ is invested at $7 \%$ compounded continuously, what is the amount after 2 years?

Solution

Step 1 :Given that the principal amount (P) is \$9000, the annual interest rate (r) is 7% or 0.07 in decimal form, and the time (t) is 2 years.

Step 2 :We use the formula for continuous compounding, which is \(A = P * e^{rt}\), where A is the amount of money accumulated after n years, including interest.

Step 3 :Substitute the given values into the formula: \(A = 9000 * e^{0.07*2}\)

Step 4 :Calculate the value of A to find the final amount.

Step 5 :Final Answer: The amount after 2 years is \(\boxed{10352.46}\).

From Solvely APP
Source: https://solvelyapp.com/problems/32868/

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