What will be the amount in an account with initial principal $9000 if interest is compounded continuously at an annual rate of 7.25% for 7 years?
A) $14,950.20
B) $5066.20
C) $9676.74
D) $9000.00

Question

Quizplus · Accepted Answer

The formula for continuous compounding is $A = Pe^{rt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (initial investment), $r$ is the annual interest rate (decimal), $t$ is the time the money is invested for in years, and $e$ is the base of the natural logarithm (approximately equal to 2.71828). Plugging in the given values: $A = 9000e^{0.0725*7}$, we find that the amount is closest to $14,950.20.

What Will Be the Amount in an Account with Initial