Aryanna invests $45,000 today into an investment that earns 7 annually, but interest is compounded continuously. what is the future value of this investment 16 years from today will be $132,847.37.
The continuous compounding formula can be found by first looking at the compound interest formula. where n is the number of times compounded, t is time, and r is the rate.
continuously compounded formula
A = P[tex]e^{rt}[/tex]
p = principal = $45000
r = rate = 7% = 0.07
t = time = 16 years
A = 45000×[tex]2.71828^{0.07*16}[/tex]
A = 45000×3.065
A = $137925 ≅ $138000
Aryanna invests $45,000 today into an investment that earns 7 annually, but interest is compounded continuously. what is the future value of this investment 16 years from today will be $132,847.37.
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