Given:
Principal value = $6520
Annual rate of interest = 2.5% compounded continuously.
Time = 3 years
To find:
The amount of money after three years.
Solution:
Formula for the value of the amount is:
[tex]V=Pe^{rt}[/tex]
Where V is the value of the account in t years, P is the principal initially invested, e is the base of a natural logarithm, and r is the rate of interest.
Putting [tex]P=6520,r=0.025,t=3[/tex], we get
[tex]V=6520e^{(0.025)(3)}[/tex]
[tex]V=6520e^{0.075}[/tex]
[tex]V=7027.80466[/tex]
[tex]V\approx 7027.80[/tex]
Therefore, the amount of money after three years is about $7027.80.
