Question

Using the continuously compounding formula, what would the be the balance if you invest $5500 at a rate of 8% compounded continuously for 6 years? PLEASE SHOW ALL OF YOUR WORK in the space provided.

Answer 1

Continuously compounding formula is given by:
A=Pe^(rn)
where:
A=future value
P=principle
r=rate
n=number of terms
From the information given:
P=$5500, r=8%, n=6 years
thus
A=5500e^(0.08×6)
A=5500e^(0.48)
A=$8888.41
The balance would be $8888.41