Question

16. Suppose you decided to place $2,500 in a savings account at First Foremost Savings and Loan. If the account pays 7% compounded continuously, how much money will you have in the account after 15 years

Answer 1

Answer:

Final Value= $7,144.13

Explanation:

Giving the following information:

Suppose you decided to place $2,500 in a savings account at First Foremost Savings and Loan. The account pays 7% compounded continuously.

Number of years= 15

Because it is compound continuously, we need to use the mathematical constant e.

To calculate the final value, we need to use the following formula:

FV= PV*[e^(i*n)]

FV= 2,500*[e^(0.07*15)]

FV= 2,500*(e^1.05)

FV= $7,144.13