Question

Myra invested $10,000 in an account earning a nominal 8% per year compounded continuously. How much was in the account at the end of one year? Round the answer to nearest dollar.

Answer 1

Answer:

$\ 10,833$  

Step-by-step explanation:

we know that

The formula to calculate continuously compounded interest is equal to

$A=P(e)^{rt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest in decimal  

t is Number of Time Periods  

e is the mathematical constant number

we have  

$t=1\ years\\ P=\ 10,000\\ r=0.08$  

substitute in the formula above  

$A=\ 10,000(e)^{0.08*1}=\ 10,833$