Question

If $17,000 is invested at a rate of 6.25% per year for 25 years, find thevalue of the investment to the nearest cent if the interest is compoundedcontinuously.

Answer 1

$81,102.46

1) Given that the principal is 17,000 let's find the Future Value of that investment:

$\begin{gathered} P=P_0e^{rt} \\ \\ F=17000e^{0.0625\times25} \\ \\ F=17000e^{1.5625} \\ \\ F\approx81,102.46 \end{gathered}$

2) So, in 25 years this investment yields: $ 81,102.46