CONTINUOUSLY: A=Pe^(rt)
(e=2.71828 18284 59045 23536…)
PERIODICALLY: A=P(1+r/n)^(nt)
P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
t = number of years the amount is deposited or borrowed for.
A = amount of money accumulated after n years, including interest.
n = number of times the interest is compounded per year
Since it's compounded continuously, use Pert (The first formula).
One thousand dollars is deposited in a savings account at 6% interest compounded continously.
How many years are required for the balance in the account to reach $2500
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