Question

Gabriela invests $1,200 into a continuously compounding account with an annual interest rate of 16 percent. Use the formula
P
(
t
)
=
1200
e
0.16
t
to determine the amount of money in the account after one year. Include cents, if needed.

Answer 1

P(1) = 1200 e^{0.16(1)} = 1200 e^{0.16}.

e^{0.16} ≈ 1.17351087, so
P(1) ≈ 1200 × 1.17351087 = 1408.213044.

Rounded to cents: $1,408.21.