If you invest $1,000,000 at 6% compounded continuously, how much interest is earned in 1 hour?

Answer 1

For continuously compounded principal, you use A=P*e^(rt) P=1,000,000 r=0.06 t=1/(365*24) because 1 hr is 1/(365*24) year.

A=1,000,000*e^(1/(365*24)) = 1,000,006.849

You subtract the principal, 1,000,000 and the answer is $6.85 rounded to the hundredths