## Related questions with answers

Question

You are investing P dollars at an annual interest rate of r, compounded continuously, for t years. Which of the following would result in the highest value of the investment? Explain your reasoning. Double your interest rate.

Solution

VerifiedAnswered 1 year ago

Answered 1 year ago

Step 1

1 of 3For continuous compounding, the balance in the account has the formula:

$A=Pe^{rt}$

where $A$ is the account balance, $P$ is the deposited/invested amount, $r$ is the rate of interest, and $t$ is the time in years.

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