Consider a CD paying a 4​% APR compounded continuously. Find the future value of the CD if you invest ​$9000 for a term of 3 years.

Answer 1

A = Pe^rt is the general formula

for continuously compounded interest

r= interest rate = 4% = .04

t = number of years = 3

P= initial investment = $9000

A = ending Amount after t years at r % compounded continuously

e= an irrational number = approximately 2.718281828

A = 9000e^.04(3)

= 9000e^.12

= $10,147.47

after 3 years at 4% compounded continuously