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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Ngọc Khuê 6 months 2021-07-15T13:27:02+00:00 1 Answers 11 views 0

Answers ( )

    0
    2021-07-15T13:28:50+00:00

    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

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