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Joaquin deposits $1,000 into an account that accrues 4% annual interest continuously compounded. What is the value of his investment after 3 years to the nearest cent?

Sagot :

Manasvivasannagariidn

Deposit: $1,000

Annual interest: 4% = 0.04

Years: 3

For this type of question, when the question asks you to "continuously compound", you use this formula: [tex]Pe^{rt}[/tex]

Solving:

[tex]1000e^{(0.04)(3)} \\1000e^{0.12} \\=1127.50[/tex]

The value of Joaquin's investment after 3 years = 1,127.50$

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