6-2 Part 1: Interest Compounded Continuously

Front

What is the formula for calculating the future value of an investment compounded continuously?

Back

A = Pe^(rt), where A is the amount of money accumulated after n years, P is the principal amount (the initial investment), r is the annual interest rate (decimal), and t is the time in years.

Front

Convert 9% into a decimal number.

Back

0.09

Front

What does it mean for interest to be compounded continuously?

Back

It means that the interest is calculated and added to the principal at every possible moment, leading to exponential growth.

Front

If Jessica invests $3,948 at 9% interest compounded continuously for 11 years, what will her account balance be?

Back

$10,624.99

Front

What is the principal amount in the equation A = Pe^(rt)?

Back

The principal amount (P) is the initial sum of money invested or loaned.

Front

How do you convert a percentage to a decimal?

Back

Divide the percentage by 100.

Front

If Kimi invests $4,000 at 3% interest compounded continuously for 4 years, how much will she have?

Back

$4,509.99

Front

What is the annual interest rate in decimal form for 2.4%?

Back

0.024

Front

What is the total amount owed after 4 years if the principal is $26,000 and the interest rate is 2.4% compounded continuously?

Back

$28,619.74

Front

If Dash invests $10,000 at 3% interest compounded continuously for 8 years, what will he have?

Back

$12,712.49