Question

Find the amount in a continuously compounded account for the given conditions.

principal: $650
annual interest rate: 6.5%
time: 20 yr
Show work

Answer 1

Amount after given year = $2,290.34 (Approx.)

Explanation:

Given:

Principal = $650

Annual interest rate = 6.5%

Time = 20 year

Find:

Amount after 20 year

Computation:

Using compound formula;

A = P[1+r]ⁿ

Where;

A = Amount after given year

P = Principal

r = Annual interest rate

n = Time taken

Amount after given year = 650[1+6.5%]²⁰

Amount after given year = 650[1+0.065]²⁰

Amount after given year = 650[1.065]²⁰

Amount after given year = 650[3.5236]

Amount after given year = $2,290.34 (Approx.)