$600 is deposited in an account that pays 7% annual interest, compounded continuously. What is the balance after 5 years?

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Answer 1 · 2018-03-02T04:23:52

#$841.80#

Compound Interest Formula:

#A=P(1+r/n)^(nt)#,

where #A# is the compound interest

where #P# is the amount deposited #($600)#

where #r# is the rate #(7%)#

where #n# is the number of times it is compounded in one year #(1)#

where #t# is the number of years #(5)#

Now, we can substitute the values:

#A=600(1+7/(100*1))^(1*5)#

#A=600(1+0.07)^5#

#A=600 * (1.07)^5#

#A=600 * 1.403#

#A=$841.80#

And there we have our answer.