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Question

Find the compound amount and compound interest if $4000 is invested for six years and interest is compounded continuously at the given annual rate. 9%

Solution

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P=$4000P=\$4000

t=6t=6

r=9%=0.09r=9\%=0.09

Need to find compound amount and compound interest.

Compound amount,

Formula,

S=PertS=Pe^{rt}

S=4000e0.096S=4000 \cdot e^{0.09 \cdot 6}

S=4000e0.54S=4000 \cdot e^{0.54}

S6864S\approx 6864

Therefore, compound amount is $6864\$6864.

compound interest=SP=S-P

compound interest=68644000=6864-4000

Therefore, compound interest is $2864\$2864.

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