If you put $1,500 in a savings account that pays 4% interest compounded continuously, how much money will you have in your account in 5 years? Assume you make no additional deposits or withdrawals.

Question

Mathematics

Guest

6 April, 19:45

If you put $1,500 in a savings account that pays 4% interest compounded continuously, how much money will you have in your account in 5 years? Assume you make no additional deposits or withdrawals.

+1

Answers (1)

Know the Answer?

Milo Bush · Answer 1

For investments with continuous compounding, the formula to use is

F = Pe^ (rn)

where F is the future worth, P is the present worth, r is the interest rate, and n is the number of years.

F = ($1500) e^ (0.04*5)

F = $1832.1

In 5 years, your account would have $1832.1.