Question

How much would $500 invested at 5% interest compounded continuously be worth after 8 years? Round your answer to the nearest cent.

Answer 1

The total would be$745.89

Answer 2

Answer:

$741.91

Step-by-step explanation:

The formula for compounded continuously is given by

$A=Pe^{rt}$

We have been given that,

P = $500

r = 5% = 0.05

t = 8 years

A = ?

Substituting these values in above written formula, we get

$A=500e^{0.05\times8}$

Simplifying the exponent

$A=500e^{0.4}$

We can further simplify it as

$A=745.9123$

Rounded this value to nearest cent

$A=745.91$

Hence, the amount will become $741.91 in 8 years.