Exponential Functions 29

Question

Find the amount of money (Future Value) in an account where $6,500 is deposited (Present Value) at an interest rate of 3% per year compounded continuously and the money is left in the account for 11 years.

The final amount is $ .

Round your answer to 2 decimal places

Answer 1

For continuous compounding, use amount A(t) = Pe^rt where P is principal or initial amount, r is interest rate in decimal form, and t is time in years. In this case, A(11) = 6500 e^(.03∗11) = $9,041.29.