Solve the problem.
-Suppose your great-great grandmother invested $700 earning 3.6% interest compounded continuously 120 years ago. How much would her investment be worth today? Round to the nearest cent.
A)$52,632.04
B)$52,620.80
C)$818.18
D)$52,620.83

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 invested for in years. Plugging in the given values: $A = 700e^{0.036 \times 120}$, calculating this gives approximately $52,632.04.

Solve the Problem. -Suppose Your Great-Great Grandmother Invested $700 Earning 3.6% Interest Compounded