Question

If 5,000,000 is invested at 4% interest compounded continuely, how much will the investment be worth in 30 years

Answer 1

If 5,000,000 is invested at 4% interest compounded continuously

For compounded continuously we use formula

`A = Pe^(rt)`

P = principal amount (the initial amount you borrow or deposit)

r = annual rate of interest (as a decimal)

t = number of years

Given P = 5,000,000 , t=30,
`r= 4% = (4)/(100)= 0.04`

Now plug in all the values in the formula

`A = 5,000,000 (e)^(0.04*30)`

= 5,000,000* 3.32012=16600584.61

the investment be worth in 30 years will be 16,600,584.61