Question

Find the future value, using the future value formula and a calculator. (Round your answer to the nearest cent.) $119,700 at 5.5% compounded continuously for 30 years $

Answer 1

The formula for continuous compounding is:

$\small \textup{A} = \textup{Pe}^{rt}$

Where,
A = Amount at the end of the period
P = Principal amount invested
r = rate of interest
t = time in years
e = mathematical constant with the value = 2.71828183

Therefore,

$\small \textup{A} = 119700\cdot e^{\left (0.055 \times 30 \right )}$

$\small = 119700 \times 2.71828183^{\left (1.65\right )}$

$\small = 119700 \times 5.20697983$

$\small = \$$623,275.49$

Therefore, the amount after 30 years will be $623,275.49