Answer:
Step-by-step explanation:
The formula for continuously compounded interest is
A = P x e (r x t)
Where
A represents the future value of the investment after t years.
P represents the present value or initial amount invested
r represents the interest rate
t represents the time in years for which the investment was made.
e is the mathematical constant approximated as 2.7183.
From the information given,
P = 100
r = 2.5% = 2.5/100 = 0.025
t = 12 years
Therefore,
A = 100 x 2.7183^(0.025 x 12)
A = 100 x 2.7183^(0.3)
A = $135.0 to the nearest cent
Answer: $135
Step-by-step explanation:
Continuously compounded interest is calculated as A = Pe^(rt)
Where:
P is the Principal, given as 100
r is the interest rate, given as 2 1/2 = 2.5% = 2.5/100 = 0.025
t is the time given as 12
e is a constant approximated as 2.7183.
Slot in the given values into the formula:
A = 100 x 2.7183^(0.025 x 12)
A = 100 x 2.7183^(0.3)
A = 100 x 1.3498
= $134.986
Approximated to the nearest cent = $135 as the fractional part is greater than 0.5, therefore, we round up to the nearest whole number.
