Question

How much would $500 invested at 5% interest compounded continuously be worth after 8 years?

a: $700
b:$709.58
c:$745.88
d.$738.73

Answer 1

D

Explanation:

We will need to use the compound interest formula:

A = P(1 + r)ⁿ

A = final amount

P = Initial amount

r = rate

n = time applied

Our equation will then look like this

A = 500(1.05)⁸

A = 738.72772