I need some help solving this written equation. Please and thank you

Question

If $1,800 is deposited into a bank account that earns 12% annual interest, compounded continuously, what is the amount in the account after 10 years, rounded to the nearest dollar? 

What formula should be used to evaluate this question?

Growth formula, decay formula, compound interest formula, continuously compounded interest formula

How much money will be in the account in 10 years?

Answer 1

The problem tells you that the interest is compounded continuously, so the formula you should use is the continuously compounded interest formula:

P(t) = P₀e^rt

1. P(t) = amount of money you have after t years
2. P₀ = starting amount of money = $1,800
3. r = interest rate expressed as a decimal = 0.12
4. t = years = 10

Plug the numbers into the formula and use your calculator to compute the answer.