Question

You invest 1,600 in an account that pays an interest rate of 6.5% compounded continuously calculate the balance after 6 years

Answer 1

The amount A when the principal P is compounded continuously is given by the formula :

`A=P E^(rt)`

Here r is rate of interest and t is time .

In the question P=1600 ,r=6.5%=0.065 ,t= 6 years

Substituting these values in the formula

`A=(1600) e^(0.065 times 6)`

A= 1600(1.48)

A=2363.17

Balance after 6years is $2363.17