Question

Express the amount that results from 100 dollars invested at 5 percent compounded continuously after a period of 2 years.

Answer 1

9514 1404 393

Answer:

$110.52

Explanation:

The formula for the amount resulting from continuous compounding is ...

A = P·e^(rt) . . . . . principal P compounded continuously at annual rate r for t years

Using your values, we have ...

A = 100·e^(0.05·2) = 100e^0.1 = 110.52

The resulting amount is $110.52.