SOLUTION: If you invest $5,900 in an account paying 12.5% compounded continuously, how much money will be in the account at the end of 3.5 years?

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Question 1120329: If you invest $5,900 in an account paying 12.5% compounded continuously, how much money will be in the account at the end of 3.5 years?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
the formula for continuous compounding is f= p * e^(rn).

f is the future value
p is the present value
r is the interest rate per time period.
n is the number of time periods.

in your problem, the formula becomes:

f = 5900 * e^(.125 * 3.5)

the interest rate per year is .125.
the number of years is 3.5.

apply the formula to get f = 9138.098762