Question

Isabella invests $10,000 in an account that is compounded continuously at an annual interest rate of 3%, according to the formula
A
=
P
e
r
t
, where
A
is the amount accrued,
P
is the principal, r is the rate of interest, and t is the time, in years. Apply the formula to find out how much Isabella’s investment will be worth in 15 years, to the nearest dollar.

Answer 1

A = Pe^{rt} = 10000 e^{0.03(15)} = 10000 e^{0.45} ≈ 10000(1.568312) ≈ $15,683.