Question

Suppose you invest $500 at an annual interest rate of 8.2% compounded continuously. How much will you have in the account after 15 years? (1 point)

$1,671.74
$17,028.75
$1,710.61
$8,140.92

Answer 1

(1.082)^15(500)=$ 1,630.71. I do not see this figure as an option, but it is the correct response.

Answer 2

The formula to find the amount with principal P, rate of interest r and time t when it is compounded continuously is
A=Pe^(rt)
P=$500 r=8.2% n=15
A=500*e^(0.082*15)
=500*e^1.23
= 1710.61476814
Rounding off to the nearest hundredths, we have
A= $1,710.61