Find the amount that results from the given investment

Question

$10 invested at 12% compounded continuously after a period of 4 years. After 4 years, the investment results in $__?

Answer 1

Continuously compounding interest uses the formula

A = Pe^rt

A = future/final amount

P = initial investment = $10

e = Napier's Number ≅ 2.7183

r = interest rate as a decimal = .12

t = time in years = 4

 

A = 10e^.12(4)

A = $16.16

 

Hope this helps.  Good luck.