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29 April, 18:39

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?

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  1. 29 April, 20:47
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    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)
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