Problema Solution
An initial investment of $2,000 earns 7% interest compounded continuously. What will the investment be worth in 15 years? (Round your answer to the nearest cent.)
Answer provided by our tutors
Using the formula for continuous compounding
A = P*(e^(r*t))
P = $2,000
r = 7% = 0.07
t = 15 years
e= 2.718281828
A = 2000(e^(0.07*15))
A = 2000 e^1.05
A = $5715.3022
A = $5715.30 to the nearest cent.