you have decided to invest $2500 at an 8% annual rate of interest how much will you have accumulated after 4 years if the interest is compounded continuously

Respuesta :

For interest compounded continuously, the relationship between the future value(FV) and present value (PV) IS :

[tex]FV\text{ = PV }\times\text{ }e^{(i\text{ }\times\text{ t)}}[/tex]

where:

i is the interest rate

t is the time in years

Using the given data:

PV = $ 2500

i = 8%

t = 4 years

The amount that would have been accumulated after 4 years:

[tex]\begin{gathered} Amount\text{ = 2500 }\times\text{ }e^{0.08\text{ }\times\text{ 4}}^{} \\ =\text{ 3442.82} \\ \approx\text{ \$3443 (nearest whole number)} \end{gathered}[/tex]