Use the compound interest formula to determine the final value of $1800 at 7% compounded continuously for 6 years.
- The formula for continuous compound interest is A = Pe^{rt}, where
- A = Amount after the given time
- P = Principal (initial investment)
- e = natural number (approx. 2.7183)
- r = interest rate (as a decimal)
- t = number of years
P = $1800, r = 0.07, t = 6
A = Pe^{rt}
A = (1800)e^{(0.07)(6)}
A = 1800e^{0.42}
A = 2739.53
The final value is $2,739.53
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