Using the formula for continuous compounding, we have:
A = P*e^(rt)
where A is the amount owed, P is the principal loan amount, r is the interest rate (as a decimal), and t is the time period.
Plugging in the given values, we get:
A = 3700*e^(0.07*4)
A = 3700*e^0.28
A = 5320.23
Therefore, the amount owed after four years is $5320.23.
A certain loan program offers an interest rate of
7%
, compounded continuously. Assuming no payments are made, how much would be owed after four years on a loan of
$3700
?
Do not round any intermediate computations, and round your answer to the nearest cent.
If necessary, refer to the
list of financial formulas
.
1 answer