Identify the key components, create a compound interest equation, and answer the questions.
You invest $5500 into an account that compounds continuously at 10% how much money will you have after 3 years? Compound interest formula: A=Pe^rt
A P= ?
B r= ?
C n= ?
D t= ?
E write the equation:
F Value after 5 years (round to two decimal places)=
A. P = $5500
B. r = 0.10 (10%)
C. n = continuously compounded
D. t = 3 years
E. A = $5500 * e^(0.10 * 3)
F. Value after 5 years (round to two decimal places) = $5500 * e^(0.10 * 3) = $7912.88.
After 3 years, you would have $7912.88 in the account.