Question

Alex borrows $2500 from a bank that has a rate of 5.5% with continuous compounding. How much does he owe after 2 years? Round to the nearest hundredths.

Answer 1

$5282.70

Explanation:

the formula for calculating future value when there is continuous compounding is : A x e^r x N

A= amount e = 2.7182818

N = number of years

r = interest rate

2500x e^0.055 x 2 = 5282.70