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Popular Word Problems >

Ingrid deposits 10,000 in an IRA. What will be the value of her investment in 6 years if the investment is earning 3.2% per year and is compounded continuously? Round to the nearest cent.

Solution

I n g r i d d e p os i t s 10, 000 in an I R A . Wha t w i ll b e t h e v a l u e o f h er in v es t m e n t in 6 ye a rs i f t h e in v es t m e n t i s e a r nin g 3.2% p er ye a r an d i s co m p o u n d e d co n t in u o u s l y ? R o u n d t o t h e n e a res t ce n t .

Solution

Amount : 12116.71

Solution steps

Translate the problem into an equation:

A = 10000 e^{0.032 \cdot 6}

10000 e^{0.032 \cdot 6} = 12116.70516 \dots

Round to the nearest hundredth:

12116.71

Amount : 12116.71

Popular Examples

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