If $7,000 is invested at 6% interest compounded continuously, the balance after 10 years will be $12,725.31.

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. Using the given values, $P = 7000$, $r = 0.06$, and $t = 10$, the calculation is $A = 7000 \cdot e^{0.06 \cdot 10}$, which does not equal $12,725.31.

If $7,000 Is Invested at 6% Interest Compounded Continuously, the Balance