Compound Interest and Continuously Compounded

What does the n stand for in this formula?

• Initial amount

• Final amount

• Rate

• Time

• The number of times compounded per year

Riley invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually, how much total will Riley earn in 15 years?

• $1,584.62

• $2,651.39

• $2,706.86

• $1,825.10

Answer explanation

1000(1 + .0675/2)^2(15)

Cora invested $400 at a rate of 35% for 8 months, compounded continuously. How much is her investment worth after 8 months? HINT: You need to change 8 months into a fractional part of a year.

• $520.07

• $505.12

• $460.11

• $7,643.74

Answer explanation

8/12 = 2/3

400e^.35(2/3)

If you deposit $1,500 at 4.9% interest, compounded continuously, what would your ending balance be to the nearest cent after 5 years?

• $987.29

• 1,152.97

• 1,378.98

• 1,916.43

If you invest $300 at 6% compounded continuously, how much money do you have after 4 years?

• $381.14

• $381.15

• $1274.01

• $381.37

Jessie puts $900.00 into an account to use for emergencies. The account earns 6 1/4% interest, compounded continuously. How much will be in the account after 7 years?

• 1484.24

• 1,393.95

• 1,041.27

• $952.86

You invest $1600 at an annual interest rate of 4.6% compounded continuously. How much will you have in the account after 4 years.

• $800.26

• $6,701.28

• $10,138.07

• $1,923.23

If $1,000 is invested at 16% interest, compounded continuously, for five years, what is the ending balance?

• $1,225,54

• $2,225.54

• $22,255.40

• $225.54

Answer explanation

1000e^.16(5)

You invest $1600 at an annual interest rate of 4.6% compounded continuously. How much will you have in the account after 4 years.

• $1,923.23

• $10,138.07

• $6,701.28

• $800.26

Answer explanation

1600e^.046(4)

Hugo opened a savings account and deposited $800 as principal. The account earns 4% interest, compounded continuously. What is the balance after 5 years?

• $832.00

• $977.12

• $973.32

• $960.00

Answer explanation

800e^.04(5)