You invest $4,900 in an account that pays an interest rate of 5.5%, compounded continuously. Calculate the balance of your account after 6 years. Round your answer to the nearest hundredth.

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Mathematics

Bradyn Phelps

21 May, 23:40

You invest $4,900 in an account that pays an interest rate of 5.5%, compounded continuously. Calculate the balance of your account after 6 years. Round your answer to the nearest hundredth.

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Chloe Kline · Answer 1

Hello there! The formula for finding the interest is P (1 + r) ^t, where P = principal, r = rate, and t = time in years. The annual interest rate is 5.5% or 0.055 in decimal form. Let's add that to 1. 1 + 0.055 is 1.055. Now, this is compounded over a time period of 6 years. We will raised 1.055 to the 6th power. 1.055^6 is 1.378842807. This is a long decimal, but DO NOT delete this from the calculator. Now, multiply by the principal, which is 4,900. When you do, you get 6,756.329753 or 6,756.33 when rounded to the nearest hundredth. There, The balance after 6 years will be $6,756.33.