Question

If $17,000 is invested at a rate of 6.25% per year for 25 years, find thevalue of the investment to the nearest cent if the interest is compoundedcontinuously.

Answer 1

$81,102.46

1) Given that the principal is 17,000 let's find the Future Value of that investment:

`\begin{gathered} P=P_0e^(rt) \\ \\ F=17000e^(0.0625*25) \\ \\ F=17000e^(1.5625) \\ \\ F\approx81,102.46 \end{gathered}`

2) So, in 25 years this investment yields: $ 81,102.46