SOLUTION: Please solve this word problem, about continuous compounding You invest $1,100 in an account that has an annual intrest rate of 2.1%, compounded continuously. How much money wil

Question 252990: Please solve this word problem, about continuous compounding
You invest $1,100 in an account that has an annual intrest rate of 2.1%, compounded continuously. How much money will be in the account after 7 years?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
continuous compounding formula is

f = future value
p = present amount
r = annual interest rate expressed as a proportion (percent divided by 100% = proportion)
t = time in years
e = the scientific constant that is equivalent to 2.718281828.........

in your problem:

p = $1,100
r = 2.1% / 100% = .021
t = 7

substitute in the formula to get:

answer is:

f = 1274.189359

you will have $1,274.19 at the end of 7 years using continuous compounding.

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