College Algebra 7th Edition

Published by Brooks Cole
ISBN 10: 1305115546
ISBN 13: 978-1-30511-554-5

Chapter 4, Exponential and Logarithmic Functions - Section 4.2 - The Natural Exponential Function - 4.2 Exercises: 2

Answer

principal interest rate per year number of years amount after $t$ years $A(2)=112.75$

Work Step by Step

In the formula $A(t)=Pe^{rt}$ for continuously compound interest, the letters $P, r$, and $t$ stand for ___ principal, interest rate per year___ and ___ number of years___ respectively, and $A(t)$ stands for ___ amount after $t$ years___. So, if \$100 is invested at an interest rate of 6% compounded continuously, then the amount after 2 years is ___$A(2)=100* e^{0.06*2}\approx{{\$}} 112.75$___.
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