Which of the following amounts is closest to the end value of investing $9,000 for 7 years at a continuously compounded rate of 11%?
A) $18,685.44
B) $19,369.83
C) $15,930.00
D) $19,437.90

Question

Quizplus · Accepted Answer

The formula for calculating the future value of an investment with 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: $A = 9000e^{0.11*7}$, we get $A ≈ 19437.90$.

Which of the Following Amounts Is Closest to the End