For the following amount at the given interest rate compounded continuously, fin

Question

For the following amount at the given interest rate compounded continuously, find (a) the future value after 9 years, (b) the effective rate, and (c) the time to reach $11,000 $5200 at 3.5% a. The future value after 9 years is approximately $ (Do not round until the final answer. Then round to the nearest cent as needed.) b. The effective rate is 1 % (Do not round until the final answer. Then round to two decimal places as needed.) C. The time to reach $11,000 from $5200 at 3.5% is years. Do not round until the final answer. Then round to two decimal places as needed.)

Explanation / Answer

A) FV = P * ert

= 5200 * e0.035 * 9

= 7125.348

B) The effective rate = er - 1

= e0.035 - 1

= 0.0356

C) A = P * ert

Or, 11000 = 5200 * e0.035t

Or, 11000/5200 = e0.035t

Or, t = ln (11000/5200)/0.035

Or, t = 21.41

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