Charlie invested $2400 at an interest rate of 5% for 5 years, where it was compounded continuously. If A = Peni, calculate the accumulated amount.
A)$12,326.64
B)$3,081.66
C)$6,163.32
D)$24,653.29

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. Given $P = 2400$, $r = 0.05$, and $t = 5$, we calculate $A = 2400e^{(0.05)(5)} = 2400e^{0.25}$. Evaluating this gives $A ≈ \$3,081.66$.

Charlie Invested $2400 at an Interest Rate of 5% for 5