​Recently, a certain bank offered a 10​-year CD that earns 11.1​% compounded continuously. Use the given information to answer the questions.

Question

​Recently, a certain bank offered a 10​-year CD that earns 11.1​% compounded continuously.

Use the given information to answer the questions.

​(a) If $20,000 is invested in this​ CD, how much will it be worth in 10 ​years?

approximately ​$ __________ ​(Round to the nearest​ cent.)

Answer 1

For compounded continuously,

A = Pe^rt

For this case,

A = 20000e^0.111(10) = 20000(3.037) = $60747.89