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## Edgar accumulated $3,000 in credit card debt. If the interest rate is 50% per year and he does not make any payments for 3 year

Question

Edgar accumulated $3,000 in credit card debt. If the interest rate is 50% per year and he does not make any payments for

3 years, how much will he owe on this debt in 3 years by compounding continuously?

Provide your answer below:

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Mathematics
6 months
2021-07-15T13:27:02+00:00
2021-07-15T13:27:02+00:00 1 Answers
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## Answers ( )

Answer:$7,459.12

Step-by-step explanation:

The formula for continuous compounding is

A = Pe^(rt), where P is the original amount, A is the accumulated amount, r is the interest rate as a decimal fraction, and t is the number of years. We want to know how much he will owe on this original $5,000 credit card debt after 2 years.

A = $5,000e^(0.20*2)

= $7,459.12

Step-by-step explanation:The formula for continuous compounding is

A = Pe^(rt), where P is the original amount, A is the accumulated amount, r is the interest rate as a decimal fraction, and t is the number of years. We want to know how much he will owe on this original $5,000 credit card debt after 2 years.

A = $5,000e^(0.20*2)

= $7,459.12