Word ProblemHere is a word problem. Matt places $1200 in an investment account earning an annual rate of 6.5%, compounded continuously. Using the formula V=Pe^rt, where V is the value of the...

Word Problem

Here is a word problem.

Matt places $1200 in an investment account earning an annual rate of 6.5%, compounded continuously. Using the formula V=Pe^rt, 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 intrest, determine the amount of money, to the nearest cent, that Matt will have in the account after 10 years.

Can you please show step by step?

Thanks!! 

Expert Answers
litteacher8 eNotes educator| Certified Educator

I no longer have a calculator that can do the e function.  However, you can use your calcultator.  Multiple 1200 by e to the power of (.065 x 10).  That's 1200e^.65.  Whatever number you get will be the amount he has in 10 years.

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