Problema Solution
$600 is deposited in an account that pays 7% annual interest,compounded continuously. What is the balance after 5 years?
Answer provided by our tutors
P = $600
t = 5 years
r = 0.07 the rate as a decimal
A = ?
Continuous compounding future value formula is:
A = P*e^(rt)
We plug the values in the formula above:
A = 600*e^(0.07*5)
........
click here to see the step by step calculation for A
........
A = $851.44
After 5 years there will be $851.44 on the account.