You deposit $875 into an account that pays 2.5% annual interest compounded continuously . Why is the balance of the account after 10 years if no money has been added or withdrawn ?

Answer 1

Greetings! Lets solve this shall we ?

So the formula for creating continuous compounds is A = Pe^rt

We have the rate as 2.5% = .025 and time t = 10 years with the initial balance of 875. We plug everything in to obtain

A = (875)e^(.025)(10)

A = (875)e^(.25)

A = $1123.52

I hope this helped!