If you invest $1,000 at 6%, compounded continuously, how much will you have at the end of the year? Round your answer to the nearest dollar.
A)$1,016
B)$1,058
C)$1,062
D)$1,060

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 values: $A = 1000 \cdot e^{0.06 \cdot 1} = 1000 \cdot e^{0.06} \approx 1061.83$, which rounds to $1,062.

If You Invest $1,000 at 6%, Compounded Continuously, How Much