If $700 is deposited in an account paying 9% compounded continuously, then what amount will be in the account after 5 years?
A) $1,097.82
B) $960.06
C) $2,157.15
D) $1,262.74

Question

Quizplus · Accepted Answer

We can use the formula for continuous compounding: 
A = Pe^(rt)
where A is the amount after t years, P is the principal, r is the annual interest rate (as a decimal), and e is the constant 2.71828...

Plugging in the values given, we have: 
A = 700e^(0.09*5)
A = 700e^0.45
A = 700*1.56827
A = $1,097.82

Therefore, the best choice is A.

If $700 Is Deposited in an Account Paying 9% Compounded