Tara invests $2,000 into a continuously compounding account with an annual interest rate of 5%. Use the formula P(t)=2,000e0.05t to determine how much money will be in her account after 15 years. (1 point) Responses $1,060.88 $1,060.88 $4,234.00 $4,234.00 $15,243.98 $15,243.98 $16,345.01

1 answer

To find the amount of money in Tara's account after 15 years using the formula for continuously compounding interest, we can plug \( t = 15 \) into the equation \( P(t) = 2000 e^{0.05t} \).

The formula becomes:

\[ P(15) = 2000 e^{0.05 \times 15} \]

Calculating the exponent:

\[ 0.05 \times 15 = 0.75 \]

Now, we substitute this back into the equation:

\[ P(15) = 2000 e^{0.75} \]

Next, we need to calculate \( e^{0.75} \). Using a calculator, we find:

\[ e^{0.75} \approx 2.117 \]

Now, substituting this value into the equation gives us:

\[ P(15) = 2000 \times 2.117 \]

Calculating this product:

\[ P(15) \approx 4234 \]

Thus, the amount of money in her account after 15 years is approximately $4,234.00.

Therefore, the correct response is $4,234.00.