An initial investment of $660 is appreciated for 11 years in an account that earns 1% interest, compounded continuously. Find the amount of money in the account at the end of the period.
A) $39,516,933.46
B) $736.74
C) $722.81
D) $1650.62

Question

Quizplus · Accepted Answer

The formula for continuous compounding is $A = Pe^{rt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), and $t$ is the time the money is deposited or borrowed for, in years. Here, $P = $660$, $r = 0.01$, and $t = 11$. Plugging these values into the formula gives $A = 660e^{0.01 \times 11}$, which calculates to approximately $736.74.

An Initial Investment of $660 Is Appreciated for 11 Years