Question

You invest $500 in an account with an annual interest rate of 1.1%, compounded continuously. How much money is in the account after 10 years? Round your answer to the nearest whole number.

A) $548

B) $558

B) $580

C) $600

Answer 1

The multiplier is given by 100% + 1.1% = 101.1% and as decimal is 1.011

The formula for compound growth is given
Final Value = Principal Amount ×
`(Multiplier)^(n)`
where n is the number of years

Final value =
`500 (1.011)^(10)`
Final value = 557.8039178 ≈ 558 (rounded to nearest whole number)

Correct answer: B