Question

how much would $500 invested at 6% interest compounded continuously be worth after 4 years? round your answer to the nearest cent

Answer 1

A=pe^rt
A=500×e^(0.06×4)
A=635.62

Answer 2

He would worth $ 635.62 ( approx )

Explanation:

Since, the amount compounded continuously,

`A=Pe^(rt)`

Where, P is the principal amount,

R is the rate per period,

t is the number of periods,

Here, P = $ 500,

r = 6 % = 0.06,

t = 4 years,

By substituting the values,

The amount after 4 years would be,

`A=500e^(0.06* 4)`

`=500e^(0.24)`

`=\$635.624575161\approx \$635.62`