Calc.

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Using calculus: If you invest $5000 compounded continuously at 4% p.a. how much will this investment be worth in 5 years? I am not sure what e is. Should my equation be this: A(t)=Pe^rt
A(t)=(5000e^(0.04)(5))
Thanks.

  • Calc. -

    e is the root of natural logarithms, 2.71828.. It has appeared in some of your previous questions, so you should be familiar with it.

    e is also the limit as n-> infinity of
    (1 + 1/n)^n. That is why it appears on the formula for continuous compounding.

    A hand calculator will let you compute 5000^*e^0.2 easily

  • Calc. -

    My other questions I didn't understand what e was either. My calculator does not allow me to perform the function that you told me. Please further explain.

  • Calc. -

    Nvm, I figured this out myself. :)

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