Chapter 11, Problem 28SGA

To determine

Find the balance for account after $10years$ .

Answer to Problem 28SGA

  $\$12388.38$

Explanation of Solution

Given information:

The interest in compounded continuously $\$6000investedat7.25\%$ .

Calculation:

Here, we will consider the following equation:

  $A=P{e}^{rt}\mathrm{.........}\left(1\right)$

In this equation, $P$ is the initial amount, $A$ is the final amount, $r$ is the annual interest rate and $t$ is the time in years. This formula is used to calculate interest that is compounded continuously.

Now, we will consider:

  $\begin{array}{l}P=\$6000,t=10years\\ r=7.25\%=\frac{7.25}{100}=0.0725\\ PutP,r,tin\left(1\right):\\ A=P{e}^{rt}\\ A=6000e^{\left(0.0725\right)10}\\ A=6000e^{0.725}\\ A=6000\times 2.0647\\ A=\$12388.38\end{array}$

Hence, the balance is $\$12388.38$ .