Question

Sarah invested $2,500 in an account paying an interest rate of 2.1% compounded continuously. Assuming no deposits or withdrawals are made, how much money, to the nearest hundred dollars, would be in the account after 14 years?

Answer 1

Answer:

$3,000

Step-by-step explanation:

This problem is based on compound interest, and the expression for the compound interest is given as

Given Data

A = final amount  =  ?

P = initial principal balance  = $2,500

r = interest rate = 2.1%= 0.021

t = number of time periods elapsed= 14 years

Substituting our data into the compound interest formula we can solve for the final amount

$A= 2500(1+0.021)^1^4\\A= 2500(1.021)^1^4\\A= 2500*1.3377\\A= 3344.25$

Hence to the nearest hundred we have the account balance has $3,000