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carlos invests $1,357 in a savings account with a fixed annual interest rate of 8% compounded continuously. What will the account balance be after 8 years?



Answer :

Answer:

$2573.52

Step-by-step explanation:

Compound Interest Formula (Continuous)

There's a formula that calculates how much an account that constantly compounds interest.

                                               [tex]P(t)=Pe^{rt}[/tex],

where P is the initial deposit, e is the natural constant (Euler's number), r is the rate of the interest (decimal form), t is the time in years, and P(t) is the value of the account at time t.

[tex]\hrulefill[/tex]

Solving the Problem

We're given

  • P = 1,357
  • r = 0.08
  • t = 8

all we have to do it plug it in and compute!

                                      [tex]P(8)=(1357)e^{(0.08)(8)}[/tex]

                                           [tex]P(8)=2573.52[/tex]

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