Question

How much would $500 invested at 8% interest compounded continuously be worth after 3 years? round your answer to the nearest cent?

Answer 1

To solve this, you'll need the interest formula:  P(1 + rt). 

Then, plug in the numbers: 
$500(1.08*3) = $1,620. That's your answer.

Answer 2

Answer:

It would be worth $635,62.

Step-by-step explanation:

The amount that you will have saved after t years is given by the following equation.

$P(t) = P(0)e^{rt}$

In which P(t) is the amount after t years, P(0) is the initial amount invested and r is the interest rate, as a decimal.

In this problem, we have that:

$P(0) = 500, r = 0.08, t = 3$

So

$P(t) = P(0)e^{rt}$

$P(t) = 500e^{0.08*3}$

$P(t) = 635.62$

It would be worth $635,62.