Question

If $2000 is invested at 8% compounded continuously, what is the amount after 2 years?

Answer 1

Given:

P=$2000

r=8% = 0.08

t=2 years

Then, if the interest is compounded continuously for t years at a rate of r per year, then the compounded amount is given by:

$A=P\cdot e^{rt}$

Therefore:

$A=2000\cdot e^{(0.08)(2)}=2000\cdot e^{0.16}=2347.02$

Answer: $2347.02