82.9k views
3 votes
Finding the final amount in a word problem on continuous compound interest

Finding the final amount in a word problem on continuous compound interest-example-1

1 Answer

1 vote

Continuously compounded interest is computed as follows:


A=Pe^(rt)

where

A: final amount

P: principal

r: annual interest rate, as a decimal

t: time, in years

Substituting with P = $1500, r = 0.05 ( = 5/100), and t = 2 years, we get:


\begin{gathered} A=1500\cdot e^(0.05\cdot2) \\ A=1500\cdot e^(0.1) \\ A=1657.76 \end{gathered}

After two years she will have $1657.76

User Lukas Novak
by
8.4k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories