You deposit $10,000 in an account that pays 6% annual interest compounded continuously.Find the balance of the account after 10 years .

Question

asked Mar 14, 2023 77.9k views

1 Answer

Avyaan · Answer 1 · 2023-03-18T05:34:26+0000

We can calculate the future value when the interest is compound continously as:

$FV=PV\cdot e^(rt)$

where r is the annual rate of interest, and t the nunmber of periods (years).

Then, for r=0.06, t=10 and PV=10,000, we have:

$FV=10,000\cdot e^(0.06\cdot10)=10,000\cdot e^(0.6)\approx10,000\cdot1.8221=18,221$

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