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Ms. Cubbatz invested a sum of money in a certificate of deposit that earns 8% interest compounded continuously. The formula for calculating interest that is compounded continuously is A = Pe". If Ms. Cubbatz made the investment on January 1, 1995, and the account was worth $12,000 on January 1, 1999, what was the original amount in the account?

Respuesta :

Answer:

original amount in the account: 8820.36   (≈ 8820)

Step-by-step explanation:

12000 = P (1 + 0.08)⁴

P = 12000 / (1 + 0.08)⁴ = 12000 / 1.36 = 8820.36   (≈ 8820)

rohiraakshay4

The original amount in the account of Ms. Cubbatz with 8 % rate of interest is $8713.79

Compound Interest:

The formula of primary money P compounded invested with rate of interest r for time t is

A = P [tex]e^{rt}[/tex]

where A is the compounded money that receives at the end

How to calculate compound interest?

Here we have given

Final money = A = $12000

rate of interest = r = 8% = 0.08

time = t = 1 Jan 1999 - 1 Jan 1995 = 4 years

Therefore

[tex]12000=Pe^{0.08(4)}[/tex]

[tex]12000=Pe^{0.32}[/tex]

[tex]P=\frac{12000}{e^{0.32}}[/tex]

P = [tex]\frac{12000}{1.37712}[/tex]

P  = $8713.79

The original amount was $8713.79

Learn more about compound interest here-

https://brainly.com/question/24924853

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