Answer:
[tex]\$34[/tex]
Step-by-step explanation:
step 1
Avery
we know that
The formula to calculate continuously compounded interest is equal to
[tex]A=P(e)^{rt}[/tex]
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
e is the mathematical constant number
we have
[tex]t=12\ years\\ P=\$2,100\\ r=7 7/8\%=7.875\%=0.07875[/tex]
substitute in the formula above
[tex]A=\$2,100(e)^{0.07875*12}=\$5,402.91[/tex]
step 2
Morgan
we know that
The compound interest formula is equal to
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
[tex]t=12\ years\\ P=\$2,100\\ r=8 1/4\%=8.25\%=0.0825\\n=1[/tex]
substitute in the formula above
[tex]A=\$2,100(1+\frac{0.0825}{1})^{1*12}=\$5,436.94[/tex]
step 3
Find the difference
[tex]\$5,436.94-\$5,402.91=\$34.03[/tex]
To the nearest dollar
[tex]\$34.03=\$34[/tex]
