You calculate the value of a $10,000 investment compounded continuously at 8% for 10 years. The result would be an example of:
A)exponential growth
B)ratio analysis
C)simple interest
D)quotients

Question

Quizplus · Accepted Answer

The calculation of an investment's value over time with continuous compounding at a given interest rate is an example of exponential growth, as the formula for continuous compounding, $A = Pe^{rt}$, where $P$ is the principal amount, $r$ is the annual interest rate, $t$ is the time in years, and $e$ is the base of the natural logarithm, demonstrates exponential growth of the investment.

You Calculate the Value of a $10,000 Investment Compounded Continuously