Question
A person places
in an investment account earning an annual rate
of
, compounded continuously. Using the formula
,
where
is the value of the account in
years, P is the principal initially
invested, e is the base of a natural logarithm, and r is the rate of interest,
determine the amount of money, to the nearest cent, in the account after
11 years.
of
where
invested, e is the base of a natural logarithm, and r is the rate of interest,
determine the amount of money, to the nearest cent, in the account after
11 years.
Ask by Harper Ramos. in the United States
Mar 21,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The amount of money in the account after 11 years is approximately $2036.57.
Solution
Given:
- Initial investment:
- Annual rate of interest:
- Time:
years
The formula to calculate the value of the account after
years is:
Substitute the given values into the formula:
Now, we can calculate the value of the account after 11 years using the formula.
Calculate the value by following steps:
Calculate the value by following steps:
- step0: Calculate:
- step1: Multiply the numbers:
- step2: Convert the expressions:
- step3: Rewrite the expression:
The amount of money in the account after 11 years is approximately $2036.57 to the nearest cent.
Answered by UpStudy AI and reviewed by a Professional Tutor
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The Deep Dive
To find the amount of money in the account after 11 years, we can use the formula
.
Here,
-
(the initial investment), -
(the annual interest rate in decimal form), -
(the number of years).
Now we can compute the value
:
Calculating
:
Now, using
:
So, the amount of money in the account after 11 years is approximately $2030.17.