Question 1153498: To save for a new car, Trafton invested $7,000 in a savings account that earns 6.5% interest, compounded continuously. After four years, he wants to buy a used car for $10,000. How much money will he need to pay in addition to what is in his savings account? (Round your answer to the nearest cent.)
Answer by ankor@dixie-net.com(22740)   (Show Source):
You can put this solution on YOUR website! To save for a new car, Trafton invested $7,000 in a savings account that earns 6.5% interest, compounded continuously.
After four years, he wants to buy a used car for $10,000.
Find the total amt after 4 yrs
the continuous interest formula: A = P*e^rt, where
A = amt after t yrs
P = initial amt
r = interest in decimal form
t = time in yrs
A = 7000 * 1.297
A = $9,078.51
:
How much money will he need to pay in addition to what is in his savings account? (Round your answer to the nearest cent.)
10000 - 9.078.51 = $921.49
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