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7 March, 12:34

How much would $500 invested at 8% interest compounded continuously be worth after 3 years? round your answer to the nearest cent?

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  1. 7 March, 13:04
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    Amount of investment after n years at continuous compounding is givent by A = Pe^rn; where P is the initial investment, r is the rate.

    Therefore, the value of $500 invested at 8% interest compounded continuously is given by 500e^ (0.08 x 3) = 500e^0.24 = 500 x 1.2712 = $635.62
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