If you put $2,000 in a savings account that pays 6% interest compounded continuously, how much money will you have in your account in 4 years? Assuming that you make no additional deposits or withdrawals?

A. $3,168.15
B. $8,326.49
C. $2,542.50
D. $2,983.65

Question

If you put $2,000 in a savings account that pays 6% interest compounded continuously, how much money will you have in your account in 4 years? Assuming that you make no additional deposits or withdrawals?

A. $3,168.15
B. $8,326.49
C. $2,542.50
D. $2,983.65

anonymous · Answer

$$
P(t) = P_0(1+r)^t
$$

anonymous · Answer

$P_0 = 2000$, $r=0.06$, and $t=4$.

anonymous · Answer

I got C when I plugged it in, thanks!

kropot72 · Answer

When you plug in the values you get $2524.95.
The formula that gives the correct answer is:
$$A=Pe ^{rt}=2000\times  e ^{0.06\times4}=2000\times1.27125=you\ can\ calculate$$