Use the continuous change function A (t) = Pert to answer the question.

You invest $2,500 in an account that grows 5% each year What will be your investment amount after 6 years?

(1 point)

Ο $2,699.72

$3,374.65

$15,769.07

$13,272.96

User Icon for Bot GPT 4-o mini Bot GPT 4-o mini answered
2 hours ago

To use the continuous growth function \( A(t) = Pe^{rt} \), where:

  • \( P \) is the principal amount (initial investment),
  • \( r \) is the annual interest rate (as a decimal),
  • \( t \) is the time in years,
  • \( e \) is the base of the natural logarithm (approximately equal to 2.71828).

Given:

  • \( P = 2500 \)
  • \( r = 0.05 \) (5% expressed as a decimal)
  • \( t = 6 \)

Now, plug these values into the formula:

\[ A(6) = 2500 \cdot e^{0.05 \cdot 6} \]

Calculating \( 0.05 \cdot 6 = 0.30 \):

So, we need to find \( e^{0.30} \):

Using a calculator (or an approximation),

\[ e^{0.30} \approx 1.34986 \]

Now plug this back into the formula:

\[ A(6) = 2500 \cdot 1.34986 \approx 3374.65 \]

Thus, the investment amount after 6 years will be approximately $3,374.65.

The answer is $3,374.65.