Question

Some banks now use continuous compounding of an amount invested. In this case, the equation that models the value of an initial investment of P dollars in t years at an annual interest rate of r is given by
A = Pe^rt. Using this equation, find the value in 5 years of an investment of $2000 that earns 7% annual interest.

Answer 1

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Answer:

  $2838.14

Step-by-step explanation:

Fill in the values and do the arithmetic.

  A = 2000e^(0.07·5)

  A = 2000e^0.35 ≈ 2838.14

The value of the investment in 5 years will be $2838.14.