Find the balance if $20,000 is invested at an annual rate of 9% for 8 years, compounded continuously.
A)$175,067.89
B)$21,872.49
C)$9735.05
D)$34,400.00
E)$41,088.66

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. Plugging in the given values: $A = 20000e^{0.09*8}$, we get $A \approx 41088.66$.

Find the Balance If $20,000 Is Invested at an Annual