Question

Bank of America offers a 5-year 8% continuously compounded investment option.

Answer 1

Answer:

A = $2130.49

Step-by-step explanation:

Given the following data;

Time, t = 5 years

Interest rate, r = 8%

Principal = $1450

To find the future value, we would use the compound interest formula;

$A = P(1 + \frac{r}{100})^{t}$

Where;

A is the future value.

P is the principal or starting amount.

r is annual interest rate.

t is the number of years for the compound interest.

Substituting into the equation, we have;

$A = 1450(1 + \frac{8}{100})^{5}$

$A = 1450(1 + 0.08)^{5}$

$A = 1450(1.08)^{5}$

$A = 1450 * 1.4693$

A = $2130.49