Question

A total of $2,000 is invested at an annual interest rate of 2%. Find the balance in the account after

Answer 1

Answer:

The balance in the account after 10 years is US$ 2,442.81

Step-by-step explanation:

1. Let's review the data given to us for answering the question:

Investment amount = US$ 2,000

Duration of the investment = 10 years

Annual interest rate = 2% compounded continuously

2. Let's find the future value of this investment after 10 years, using the following formula:

FV = PV * eˣ ⁿ

PV = Investment = US$ 2,000

number of periods (n) = 10 (10 years compounded continuously)

rate (x) = 2% = 0.02

e = 2.71828 (Euler's number)

Replacing with the real values, we have:

FV = 2,000 * (2.71828)^0.02*10

FV = 2,000 * 2.71828^0.2

FV = 2,000 * 1.2214027

FV = US$ 2,442.81