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You have invested $1,000 in a bank @5% interest compounded continuously. How much money will you have at end of 1 year?

+1 vote
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You have invested $1,000 in a bank that will give you 5% interest compounded continuously. How much money will you have at the end of 1 year?

Hint: mathematical constant "e" is used for everything in nature that multiplies continuously, from bacteria to greenbacks.
It represents the maximum amount of product for any reaction on a continuous basis.

posted Sep 16, 2016 by George Davros

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1 Answer

+1 vote

P = A * [e ^ (rt)]
a = $1000
r = .05
t = 1

So
P = 1000*(e^.05)

or
P = $1051.27

answer Sep 16, 2016 by Salil Agrawal



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