question is in the description

Question

Ron deposits $2,000 into an account that receives 3.1% interest compounded continuously. How much money is in the account after 9 years?

A) $2,605.83

B) $2,643.61

C) $2,623.70

D) $2,632.44

Answer 1

Continuous interest compound:

A = P ∗ e^rt

A: balance in the account after t years

P: principal or starting balance

e: euler's number = 2.718

r: rate

t: number of years

In this case:

A = 2000 (2.718)^{0.031 ∗ 9}

A = 2000 (1.322)

A = 2643.61

It will be $2,643.61 in the account.

Answer 2

A = Pe^rt is the formula you need.

where P is the Principal (initial amount), e is the mathematical constant (e =2.71828....), r is the interest rate for t years and A is the future amount.

Substitute the given values in the formula and calculate. See which answer choice matches your calculated answer or is the closest to your calculated answer.

My questions to you: In what other ways can the interest be compounded? What formula will help you in each of those situations?

Please write them down on an index card and practice.