Question

A total of $500 is invested at an annual interest rate of 7%. Find the balance after 20 years if the

interest is compounded continuously.
$1934.84
$2003.20
O $2027.60

Answer 1

To find the final balance of an account earning interest compounded continuously, you can use the formula:

A = Pe^(rt)

where A is the final account balance, P is the initial principal (or starting) amount, r is the interest rate, and t is the time (in years) for which the interest is being calculated.

Substituting in the given values:

A = 500 * e^(0.07 * 20)