## Related questions with answers

Question

Suppose an investment account is opened with an initial deposit of $12,000 earning 7.2% interest compounded continuously. How much will the account be worth after 30 years?

Solution

VerifiedStep 1

1 of 3Remember the formula for a continuous growth/decay is represented by

$A(t) = ae^{rt}$

where $a$ is the initial value, $r$ is the continuous growth rate and $t$ is the elapsed time.

Remember that if $r > 0$, the formula shows continuous growth, while if $r < 0$, then the formula shows continuous decay.

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