Question

If 5,000,000 is invested at 4% interest compounded continuely, how much will the investment be worth in 30 years

Answer 1

If 5,000,000 is invested at 4% interest compounded continuously

For compounded continuously we use formula

$A = Pe^{rt}$

 P = principal amount (the initial amount you borrow or deposit)  

r  = annual rate of interest (as a decimal)

t  = number of years  

Given P = 5,000,000 , t=30, $r= 4% = \frac{4}{100}= 0.04$

Now plug in all the values in the formula

$A = 5,000,000 (e)^{0.04*30}$

= 5,000,000* 3.32012=16600584.61

the investment be worth in 30 years will be  16,600,584.61