Question

How much will $100 grow to if invested at a continuously compounded interest rate of 7.5% for 7 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

How much will $100 grow to if invested at a continuously compounded interest rate of 7% for 7.5 years? (Do not round intermediate calculation

Answer 1

Answer a.

Amount Invested = $100
Interest Rate = 7.50%
Time Period = 7 years

Accumulated Value = $100 * exp(Interest Rate * Time Period)
Accumulated Value = $100 * exp(0.0750 * 7)
Accumulated Value = $100 * 1.6905
Accumulated Value = $169.05

Answer b.

Amount Invested = $100
Interest Rate = 7.00%
Time Period = 7.50 years

Accumulated Value = $100 * exp(Interest Rate * Time Period)
Accumulated Value = $100 * exp(0.07 * 7.50)
Accumulated Value = $100 * 1.6905
Accumulated Value = $169.05