Question

How much will $100 grow to if invested at a continuously compounded interest rate of 10% for 8 years?

Answer 1

Answer:

It will grow to $222.55.

Step-by-step explanation:

The formula for continuosly compounded money quantities is:

$F = Pe^{rt}$

In which F is the final amount, that is, to how much the money grows, P is the initial deposit, r is the interest rate, as a decimal, and t is the time, in years.

In this problem, we have that:

$P = 100, r = 0.1, t = 8$

So

$F = Pe^{rt}$

$F = 100e^{0.1*8}$

$F = 222.55$

It will grow to $222.55.