You invest $3,000 in an account with an interest rate of 5.5% compounded continuously. How much money would be in the account after 5 years? Round your answer to the nearest whole number.

Question

imstuck · Answer

Do you know the equation for this?

quietus · Answer

M = P( 1 + i )^n

M is the final amount including the principal.

P is the principal amount.

i is the rate of interest per year.

n is the number of years invested.

quietus · Answer

A tip for compounding interest, you could just add 100 to the percentage (5.5% in this case)

and times 105.5 to the value

quietus · Answer

and times 5 years

kropot72 · Answer

The equation for continuous compounding is not the same as the equation for periodic compounding.
For continuous compounding the amount A after t years at an annual interest rate of r expressed as a decimal is:
$$A=Pe ^{rt}$$

anonymous · Answer

general formula |dw:1403985636772:dw|P = principal amount
e = the e button on your calculator
r = the rate 
t = time