Question

Suppose $12,000 is deposited into an account paying 5.5% interest, compounded continuously.

How much money is in the account after five years if no withdrawals or additional deposits are
made?

Answer 1

$15798.4

Explanation:

We will have to use this formula A = Peᵃᵇ

A = Final amount

P = Initial amount (12,000)

e = Mathematical constant: 2.7183

a = Interest rate (5.5% or 0.055)

b = Years

So our equation will look like this

A = 12,000e⁵ ⁰·⁵⁵

A = 12,000(2.7183)·²⁷⁵

A = 12,000(1.316533)

A = 15798.396