Question

Dalia deposits $1,200 in an account that earns 5% interest per year compounded continuously. How much will the account be worth in 3 years?

Answer 1

Amount deposited = $1,200
Interest rate = 5%
Time period = 3 years

Future value = Amount deposited * exp(Interest rate * Time period)
Future value = $1,200 * exp(0.05 * 3)
Future value = $1,200 * exp(0.15)
Future value = $1,200 * 1.161834
Future value = $1,394.20

So, the account will worth $1,394.20 in 3 years