If you invest $20,000 at 9% interest compounded continuously, what is the average amount in your account over 1 year? Please round your answer to the nearest cent.
A)$20,900
B)$10,900
C)$5,450
D)$21,800
E)$20,927.62

Question

Quizplus · Accepted Answer

The formula for continuously compounded interest is $A=Pe^{rt}$, where $A$ is the ending balance, $P$ is the principal, $r$ is the annual interest rate, and $t$ is the time in years. Plugging in the given values, we get:

$A = 20000e^{0.09(1)} \approx \boxed{20927.62}$

Therefore, the average amount in your account over 1 year is $20927.62/1 = \boxed{20927.62}$.

If You Invest $20,000 at 9% Interest Compounded Continuously, What