Question

What is the total investment of $2150 invested at 5.3% for 16 years and compounded continuously?

$5,968.93
$6,000.00
$5,152.68
$5,020.19

Answer 1

The total investment is $5020.19

Explanation:

Given : $2150 invested at 5.3% for 16 years and compounded continuously

To find : What is the total investment?

Solution :

The formula of continuously compounded interest is

`A = Pe^(rt)`

Where A = amount invested

P = principal = $2150

e = Euler's number (on calculator)

r = interest rate as decimal = 5.3%=0.053

t = time in years = 16 years

Substitute the value in the formula,

`A = Pe^(rt)`

`A = 2150* e^(0.053* 16)`

`A = 2150* e^(0.848)`

`A = 2150* 2.3349`

`A = 5020.19`

Therefore, Option 4 is correct.

The total investment is $5020.19.