Question

If $2000 is invested at 8% compounded continuously, what is the amount after 2 years?

Answer 1

Given:

P=$2000

r=8% = 0.08

t=2 years

Then, if the interest is compounded continuously for t years at a rate of r per year, then the compounded amount is given by:

`A=P\cdot e^(rt)`

Therefore:

`A=2000\cdot e^((0.08)(2))=2000\cdot e^(0.16)=2347.02`

Answer: $2347.02