Use the compound interest formulas A=P(1+(r)/(n))^nt and A=Pe^rt to solve.

Question

Find the accumulated value of an investment of $5000 at 7% compounded continuously for 6 years.

Answer 1

the underlying formula that you want to use here for continuous compounding is

A = P*e^(rt)

for this scenario that means taking

A = 5000 * e^(0.07*6)

A = 7609.81

meaning that the accumulated amount in the account after 6 years is $7,609.81

Answer 2

A = 5000e^0.07(6)

 

Put the right side in your calculator for your answer.