MATH SOLVE

2 months ago

Q:
# Lucky Jack wins the lottery! He deposits $100,000 in an account that earns 4% interest compounded continuously. How much money is in the account at the end of 5 years?A) $120,357 B) $122,140 C) $125,620 D) $225,820

Accepted Solution

A:

Answer:Option B) $122,140 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=5\ years\\ P=\$100,000\\ r=0.04[/tex] substitute in the formula above [tex]A=\$100,000(e)^{0.04*5}=\$122,140.28[/tex] Round to the nearest dollar[tex]\$122,140.28=\$122,140[/tex]