Algebra 2 Common Core

Published by Prentice Hall
ISBN 10: 0133186024
ISBN 13: 978-0-13318-602-4

Chapter 7 - Exponential and Logarithmic Functions - Mid-Chapter Quiz - Page 461: 17

Answer

$\approx\$11,843.27$

Work Step by Step

Recall: Continuous Compounding Formula: $$A=Pe^{rt}$$ where $A$ = future value of the investment $P$ = principal or amount invested $r$ = interest rate per year $t$ = time in years Thus, the future value of a $\$6000$ investment compounded continuously earning an annual interest rate of $6.8\%$ after $10$ years is: \begin{align*} A&=6000\left(e^{6.8\% \cdot 10}\right)\\ A&=6000\left(e^{0.068 \cdot 10}\right)\\ A&=6000\left(e^{0.68}\right)\\ A&\approx 11,843.27 \end{align*} The value of the investment after $10$ years is around $\$11,843.27$.
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