Question

Can someone please explain to me how to solve this?:))

What is the total amount for an investment of $100 invested at 3.5% for 8 years and compounded continuously?

Answer 1

Start with the continuous compounding formula.


A=100%2Ae %5E%280.035%2A8%29 Plug in P=100, r=0.035 (the decimal equivalent of 3.5%), and t=8.


A=100%2Ae%5E%280.28%29 Multiply 0.035 and 8 to get 0.28.



A=100%2A1.32312981233744 Raise 'e' (which is approximately 2.71828) to the power 0.28 to get 1.32312981233744 (this value is approximate).


A=132.312981233744 Multiply 100 and 1.32312981233744 to get 132.312981233744.


A=132.31 Round to the nearest hundredth (ie to the nearest penny).


So the answer is $132.31

if you dont understand then got to http://www.algebra.com/algebra/homework/word/finance/Money_Word_Problems.faq.question.612964.html