Problema Solution
You deposit $5000 in an account earning 8% interest compounded continuously. How much will you have in the account in 10 years?
Answer provided by our tutors
P = $5,000 principal amount (initial investment)
r = 0.08 annual interest rate (as a decimal)
t = 10 years number of years
e = 2.718281 is Euler's number
A = amount after time t
A = P*(e^(rt))
A = 5000(2.718281^(0.08*10))
A = $11,127.70
there will be $11,127.70 on your account after 10 years.