Question

If $516 is invested at an interest rate of 9% per year and is compounded continuously, how much will the investment be worth in 5 years?

Answer 1

$809.25

Explanation:

You are going to want to use the continuous compound interest formula, which is shown below.

`A = Pe^(rt)`

A = total

P = principal amount

r = interest rate (decimal)

t = time (years)

First, lets change 9% into a decimal:

9% ->
`(9)/(100)` -> 0.09

Lets plug in the values now:

`A=516e^(0.09(5))`

`A=809.25`

The investment will be worth $809.25 after 5 years.