Question

Ivan invested $2,900 in an account with nominal annual interest rate of 8%, compounded continuously. What is the account balance after 4 years?

Answer 1

The amount would be $ 3993.67 (approx)

Explanation:

Given,

The invested amount or principal amount, P = $ 2,900

The annual rate of interest, r = 8% = 0.08,

Since, the amount formula in compound continuously interest,

`A=P e^(rt)`

Where,

t = number of years,

Hence, the account balance after 4 years,

`A=2900 e^(0.08* 4)=2900 e^(0.32)\approx \$3993.67`