What is the future value of $1,000 continuously compounded at a rate of 10% p.a.for 5 years?
A)$1,610.51
B)$1,648.72
C)$1,498.43
D)$1,500.00

Question

Quizplus · Accepted Answer

The formula for continuously compounded interest is FV=Pe^rt, where P is the principal, e is Euler's number (approximately 2.71828), r is the interest rate, and t is the time period. Plugging in the values, we get FV= $1,000 x e^(0.1 x 5) = $1,648.72. Therefore, the best choice is B.

What Is the Future Value of $1,000 Continuously Compounded at a Rate