Question

If $5,000,000 is invested at 4% interest compounded continuously, how much will the invest be worth in 30 years?

a.)$16,501,934.47
b.)$16,567,490.07
c.)$16,600,584.61
d.)$16,405,153.94

Answer 1

5,000,000*1.04^30=16216987.550....

Is what I got....and it's not in the list...

Answer 2

you have to use euler constant if its compounded continuously
\[A=P e^{rt}\]r: interest
t: number of years

Answer 3

whats the difference in "compounding continuously for 30 years" and "compound 30 years"

Answer 4

a bank usually gives you the interest of 4% p.a. once a year
they add your interest to the account and in the next year, the interest will also earn interest (compounding).
they do it once a year.

if it's compounded continuously, they basically add 4%/365 of interest every day. because they're already increasing the account balance within the first day, you will make slightly more off of compounding (interest on interest).

Answer 5

hmmmmm ok thanks

Answer 6

I got $16,216,987\.88

Answer 7

5*10^6*e^(30*.04)