Question

If $625 is invested at an interest rate of 7% per year and is compounded

continuously, how much will the investment be worth in 12 years? Use the
continuous compound interest formula: A = Pe^rt

Answer 1

It will be worth approximately $ 1447.73.

Explanation:

Since, the amount formula in compounded continuously,

Where,

P is the principal amount,

r is the rate per period,

t is the number of periods,

e is Euclid number,

Here, P = $ 625,

r = 7% = 0.07,

t = 12 years,

Hence, the amount after 12 years would be,