Question

How much would $500 invested at 8% interest compounded continuously be

worth after 3 years? Round your answer to the nearest cent.​

Answer 1

`\$635.62`

Explanation:

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=3\ years\\ P=\$500\\ r=0.08`

substitute in the formula above

`A=\$500(e)^(0.08*3)`

`A=\$635.62`