Answer:
$1529
Explanation:
The formula for continuous compounding is:
A = Pe^(rt)
Where:
A = the final amount (balance) in the account
P = the initial principal (deposit)
e = Euler's number (approximately 2.71828)
r = the annual interest rate (as a decimal)
t = the time period (in years)
Plugging in the given values, we get:
A = 1000e^(0.0855)
A = 1000*e^0.425
A = 1000*1.529
A = 1529
Therefore, the balance after 5 years with continuous compounding at 8.5% interest rate is $1529.