Question

You invest 4,900 in an account that pays an interest rate of 5.5%, compounded continuously. Calculate the balance of your account after 6 years. Round your answer to the nearest hundredth.

Answer 1

In 6 years, you will have $6,815.57 = $6,800
Compounded daily.

Compound Interest EquationA = P(1 + r/n)^ntWhere:A = Accrued Amount (principal + interest)
P = Principal Amount
I = Interest Amount
R = Annual Nominal Interest Rate in percent
r = Annual Nominal Interest Rate as a decimal
r = R/100
t = Time Involved in years, 0.5 years is calculated as 6 months, etc.
n = number of compounding periods per unit t; at the END of each period