Question

Gabriela invests $1,200 into a continuously compounding account with an annual interest rate of 16 percent. Use the formula P(t)=1,2000e^(0.16t) to determine the amount of money in the account after one year. Include cents, if needed.

Answer 1

P(t)=1200e^{0.16t}, so after one year
P(1)=1200e^{0.16} ≈ 1200(1.17351087) ≈ $1,408.21.