Question

If 4,000,000 is invested at 5% interest compounded continuously, how much will the investment be worth in 25 years

Answer 1

If is known that, if the interest i s compounded continuously, the principal changes f the rate equal to the product of the rate of bak interest per annum, and the principal. If the interest is compounded continuously at 5% per annum, in how many years will Rs. 100 double itself? At what interest rate will Rs. 100 double itself in 10 years ((log)e2=0.6931)
How much will Rs. 1000 be worth at 5% interest after 10 years? (e0.5=1.648).

Answer 2

Answer: FV = $13,961,371.83 The phrase "compounded continuously" has nothing to do with when the interest was compounded but refers to how the annual rate was miscalculated by multiplying an interval rate by the number of intervals in a year. Such rates are called "nominal" rates as they are known to be incorrect but close. A compounded continuosly rate is the worse that such a rate could be from the true rate and is when the number of intervals is infinite. Basically 5% per annum compounded continuously is really more like 5.1271% per annum.

Explanation: