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Suppose you invest $300 at annual interest rate of 4.5% compounded continuously.

How much will you have in the account after 7.5 years?

User Isuruanu
by
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1 Answer

5 votes

Answer:


\$420.43

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=7.5\ years\\ P=\$300\\ r=0.045

substitute in the formula above


A=300(e)^(0.045*7.5)


A=\$420.43

User Cy
by
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