Question

If $740 is invested at an interest rate of 11% per year and is compounded continuously, how much will the investment be worth in 7 years?
Use the continuous compound interest formula A = Pert.

Answer 1

Answer:

$\ 1,598.23$  

Step-by-step explanation:

we know that

The formula to calculate continuously compounded interest is equal to

$A=P(e)^{rt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest in decimal  

t is Number of Time Periods  

e is the mathematical constant number

we have  

$t=7\ years\\ P=\ 740\\ r=0.11$  

substitute in the formula above  

$A=\ 740(e)^{0.11*7}$  

$A=\ 1,598.23$