SOLUTION: Suppose that you invest $6,000 at 2% interest compounded continu- ously. How much money will be in your account in 5 years? Round your answer to the nearest cent. Do not include

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Question 540403: Suppose that you invest $6,000 at 2% interest compounded continu-
ously. How much money will be in your account in 5 years? Round your
answer to the nearest cent.
Do not include commas or u
Answer by jpg7n16(66) About Me  (Show Source):
You can put this solution on YOUR website!
The formula for continuous compounding is:
x=p%2A%28e%5E%28r%2At%29%29
It kinda looks like "expert" when you write it out...
.
"x" is the amount of money you'll have at the end (think X marks the spot)
"P" is the original principal (P=$6,000)
"e" is a constant, that you'll use on your calculator (likely looks like this: e%5Ex)
"r" is the rate of interest earned each year (r=2%=.02)
"t" is the time in years (t=5)
.
Simply take the formula, plug in your numbers, and use a calculator to solve.
x=p%2A%28e%5E%28r%2At%29%29
x=6000%2A%28e%5E%28.02%2A5%29%29
x=6000%2A%28e%5E%28.10%29%29=6000%2A1.1052=6631.03
Therefore, after 5 years of continual compounding, you will have $6,631.03 in your account.