If $7500 is invested with an interest rate of 5%, compounded continuously, determine the amount of money in the account after 4 years.

Question

anonymous · Answer

9160?

anonymous · Answer

Continuously compounded means that the interest for an account is being calculated and applied constantly. The basic formula for continuously compounded interest is A=P*e^(r*t).
Where P is the principle invested, e is the exponential function, r is the interest rate, t is the time period of investment, and A is the total amount after time t.

So, in your question, A = 7500 * e^(0.05*4)

or $9160.52