Suppose an investment of $24,000 is invested at an annual rate of 5.4%

Question

Suppose an investment of $24,000 is invested at an annual rate of 5.4%, compounded continuously. What is the value of the account after 12 years? Round your answer to the nearest cent/penny.

Answer =  dollars. (Round to two decimal places)

Answer 1

For this problem you need to use the continuous compound interest formula [ P(term)=P₀e^rt] where

P₀=initial principal investment (24,000)

r=interest rate (.054)

t=time period (12 years)

e=2.7183 which is constant

Answer= 45,881.32 [P(t)=(24000)(2.7183^(.054)(12))]