Question

Find the accumulated value of an investment of $7,000 at 7% compounded continuously for 6 years. Solve this question using the correct formula for compound interest.

Answer 1

Answer:

$\ 10,653.73$  

Step-by-step explanation:

we know that

The formula to calculate continuously compounded interest is equal to

$A=P(e)^{rt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest in decimal  

t is Number of Time Periods  

e is the mathematical constant number

we have  

$t=6\ years\\ P=\ 7,000\\ r=7\%=7/100=0.07$  

substitute in the formula above

$A=7,000(e)^{0.07*6}$  

$A=7,000(e)^{0.42}$  

$A=\ 10,653.73$