If 1500 is invested at an interest rate of 35 per year compo

If $1500 is invested at an interest rate of 3.5% per year, compounded continuously, find the value of the investment after the given number of year. (Round your answers to the nearest cent.) (a) 3 years $ (b) 6 years $ (c) 18 years $

Solution

when compounded continously A = P*e^rt ,A is the value of the investment after t years.P is the amount invested, r is the annual rate of interest

(a)

P=1500,r=3.5%=0.035 , t =3

A = 1500*e^0.035*3

A =1666.07

value of the investment after 3 years is 1666.07 dollars

(b)

P=1500,r=3.5%=0.035 , t =6

A = 1500*e^0.035*6

A =1850.52

value of the investment after 6 years is 1850.52 dollars

(c)

P=1500,r=3.5%=0.035 , t =18

A = 1500*e^0.035*18

A =2816.42

value of the investment after 18 years is 2816.42 dollars