Question

Find the amount in a continuously compounded account for the given condition. Principal: $250, annual interest rate: 6.2%, time: 2.5 yr

Answer 1

The Final Investment Value is
`\$291.91`

Explanation:

we know that

The formula to calculate continuously compounded interest is equal to

`A=P(e)^(rt)`

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

`t=2.5\ years\\ P=\$250\\ r=0.062`

substitute in the formula above

`A=\$250(e)^(0.062*2.5)=\$291.91`