An initial amount of $5500 is invested in an account with interest compounded continuously. The interest rate is 10%. Find the value of the account after 14 years.
A) $22,303.60
B) $6,614,323,547.27
C) $21,643.60
D) $5501.40

Question

Quizplus · Accepted Answer

The formula for continuous compounding is $A = P e^{rt}$, 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 invested for in years. Plugging in the given values: $A = 5500 \cdot e^{0.10 \cdot 14}$, we get approximately $22,303.60.

An Initial Amount of $5500 Is Invested in an Account