Question

Suppose you invest $1500 at an Annual interest rate of 5% compounded continuously. How much will you have in the account after 4 years? Round the solution to the nearest dollar.

Answer 1

So you know the compound continuously formula is
`A = Pe^(rt)`. Thus, just plug in.
`A = (1500)e^((.05)(4))` Plug that into your calc to get $1832.

Answer 2

$1832

Explanation:

Principal P= $1500

Rate of interest =r = 5 % = 0.05

Time t = 4 years

Formula for continuous compounding:
`A=Pe^(rt)`

Substitute the values in the formula

`A=1500e^(0.05 * 4)`

`A=1832.10413`

So, you will have $1832 in the account after 4 years.