Question

Suppose that $ 1,175 is invested at 7.71 % compounded continuously. How much isin the account after 19 years? Round your answer to the nearest cent. Write only anumber as your answer. Do not write any units.

Answer 1

To calculate the ammount we have in an account after a certain time with an interes rate compound continuouly we have to use the formula:

$FV=Pe^{rt}$

where FV is the future value, P in the principal (the initial ammount we invest), e is the euler number (2.7182....), r is the interest rate in decimal form and t is the time.

Then, in our case we have:

$\begin{gathered} FV=1175e^{0.0771\cdot19} \\ =5084.35 \end{gathered}$

Therefore, there will be $5084.35 in the account after 19 years.