If $4500 is invested at an interest rate of 7.25%per year compounded continuously find the value of the investment after 4,8, and 12 years

Question

If $4500 is invested at an interest rate of 7.25%per year compounded continuously find the value of the investment after 4,8, and 12 years

Answer 1

C ompound continuosly A = Pe^rt, where P = $4500, r = 7.25% = 0.0725, t is time in years

If t = 4 years A = 4500e^0.0725·4 = $6013.92;

If t = 8 years then A = 4500e^0.0725·8 = $8037.17;

If t = 12 years then A = 4500e^0.0725·12 = $10741.10