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Find the amount that results from the given investment, 20$ invested at 7% compounded continuously for 4 years

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Answer to a math question Find the amount that results from the given investment, 20$ invested at 7% compounded continuously for 4 years

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Ali
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44 Answers
To find the amount resulting from the investment, we use the formula for continuously compounded interest:

A = P \times e^{rt}

Where:
A = the amount after t years
P = the principal amount (initial investment)
r = annual interest rate (as a decimal)
t = time in years
e = Euler's number, approximately 2.71828

Given:
P = 20, r = 0.07, and t = 4

Plugging the values into the formula, we get:

A = 20 \times e^{0.07 \times 4}

A = 20 \times e^{0.28}

A = 20 \times 1.323130

A = 26.4626

\boxed{A = 26.46}

Therefore, the amount resulting from the investment of $20 at 7% compounded continuously for 4 years is $26.46.

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