Question

Miguel’s bank is offering savings accounts with 4% interest compounded continuously, If Miguel invests $500 how much will he have after 2 years

Answer 1

Answer:

After 2 years Miguel will have in his account $541.64

Step-by-step explanation:

The formula for calculating compound interest continuously is:

$A=pe^{rt}$

Where A is the amount of money obtained after t years.

r is the compound interest rate and p is the initial amount

In this case we have that:

$p=\ 500\\\\t=2\ years\\\\r=0.04$

Then we must find the final amount A

$A=500e^{0.04(2)}$

$A=\ 541.64$