CONTINUOUSLY COMPOUNDED INTEREST FORMULA amount at the end Principal (amount at start) annual interest rate (as a decimal) time (in years)

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Presentation transcript:

CONTINUOUSLY COMPOUNDED INTEREST FORMULA amount at the end Principal (amount at start) annual interest rate (as a decimal) time (in years)

Suppose $5000 is put into an account that pays 4% compounded continuously. How much will be in the account after 3 years? Example 1

If interest is compounded continuously at 4.5% for 7 years, how much will a $2000 investment be worth at the end of 7 years? Example 2

How long will it take $3000 to double if it is invested in an account that pays 3% compounded continuously? Example 3

If $8000 is invested in an account that pays 4% interest compounded continuously, how much is in the account at the end of 10 years? Example 4

How long will it take $4000 to triple if it is invested at 5% compounded continuously? Example 5