If $945 is invested at an interest rate of 4% per year and is compounded continuously, how much will the investment be worth in 10 years?Use the continuous compound interest formula A = Pert.A. $947 B. $984C. $1,028D. $1,410

Accepted Solution

Answer:Option D [tex]\$1,410[/tex]  Step-by-step explanation:we know that The formula to calculate continuously compounded interest is equal to [tex]A=P(e)^{rt}[/tex]  where  A is the Final Investment Value  P is the Principal amount of money to be invested  r is the rate of interest in decimal  t is Number of Time Periods  e is the mathematical constant number we have  [tex]t=10\ years\\ P=\$945\\ r=0.04[/tex]  substitute in the formula above  [tex]A=945(e)^{0.04*10}[/tex]  [tex]A=945(e)^{0.4}[/tex]  [tex]A=\$1,410[/tex]