If $1,000 is invested at 4 percent compounded continuously, what is the balance after 12 years?
A) $618.78
B) $1,040.00
C) $1,616.07
D) $1,601.03

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. Plugging in the given values: $A = 1000 \cdot e^{0.04 \cdot 12} = 1000 \cdot e^{0.48} \approx 1616.07$.

If $1,000 Is Invested at 4 Percent Compounded Continuously, What