Question

Suppose you invest $2200 at an annual interest rate of 5.3% compounded continuously. How much will you have in the account after 7 years?

Answer 1

Explanation:

step 1. Let's call the amount of money A.

step 2. A = A¡e^(rt) (continuously compounding equation)

step 3. A = A¡e^(rt). A¡ = initial amount. r = rate, t = time.

step 4. A = 2200e^((.053)(7)

step 5. A = $3188.20