Problem

The Sharma's earn $\$ 12000$ per year on their small internet business. If this is viewed as a continuous income stream, how much would this money accrue to in 7 years at $3.95 \%$ interest compounded continuously? Round your answer to the nearest dollar and do not use commas in the answer blank. \[ \$ \]

Solution

Step 1 :Use the formula for continuous compounding interest: \(A = P \cdot e^{rt}\)

Step 2 :Let \(P = 12000\), \(r = 0.0395\), and \(t = 7\)

Step 3 :Calculate the amount accrued: \(A = 12000 \cdot e^{0.0395 \cdot 7}\)

Step 4 :Round the final answer to the nearest dollar: \(A \approx 15822\)

Step 5 :The final amount accrued in 7 years at \(3.95\%\) interest compounded continuously is \(\boxed{15822}\)

From Solvely APP
Source: https://solvelyapp.com/problems/5YwhmFbMHM/

Get free Solvely APP to solve your own problems!

solvely Solvely
Download