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How much will $100 grow to if invested at a continuously compounded interest rate of 10% for 8 years?

User Pokeb
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1 Answer

5 votes

Answer:

It will grow to $222.55.

Explanation:

The formula for continuosly compounded money quantities is:


F = Pe^(rt)

In which F is the final amount, that is, to how much the money grows, P is the initial deposit, r is the interest rate, as a decimal, and t is the time, in years.

In this problem, we have that:


P = 100, r = 0.1, t = 8

So


F = Pe^(rt)


F = 100e^(0.1*8)


F = 222.55

It will grow to $222.55.

User Iamanigeeit
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