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Question

# Find the amount in the account for the given principal, interest rate, time, and compounding period. P = \$1,000, r = 2.8%. t = 5 years; compounded continuously

Solution

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Step 1
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Use the continuously compounded interest formula given by:

$A=Pe^{rt}\color{white}{\tag{1}}$

where:

\begin{align*} P&=\text{the initial principal invested}\\ e&=\text{the natural base}\\ r&=\text{annual interest rate, written as a decimal}\\ A&=\text{the value of the account after t years} \end{align*}

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