YOU DEPOSIT $5,000 INTO THE FIRST NATIONAL BANK OF FIN 301 AND EARN 2.5% COMPOUNDED CONTINUOUSLY. HOW MUCH WILL YOU HAVE IN 5 YEARS?
P = Po*e^rt.
Po = $5,000.
rt = (2.5%/yr * 5yrs.) / 100% = 0.125 = 5-yr % rate expressed as a decimal
Plug the above values into the given Eq.
Answer: $5665.74.