How much would Sophie have in her account at the end of 10 years if she deposit $2,000 into the account today if she earned 8 percent interest and interest is compounded continuously?
A) $4,317
B) $4,134
C) $4,451
D) $4,521

Question

Quizplus · Accepted Answer

The formula for continuous compounding is:

A = Pe^(rt)

Where:
A = Final amount
P = Principal (initial deposit)
e = Euler's number (approximately equal to 2.718)
r = Annual interest rate (in decimal form)
t = Time (in years)

Plugging in the values given in the problem, we get:

A = 2000e^(0.08*10)
A ≈ $4,450.99

Therefore, the closest answer choice is C) $4,451.

How Much Would Sophie Have in Her Account at the End