A person invests 100,000 at a nominal 12% interest per year compounded continuously. What will be the value of the investment in 30 years?Round your answer to the nearest dollar. Do not include the dollar sign in your answer.

Solution

A p erso n in v es t s 100, 000 a t a n o mina l 12% in t eres t p er ye a r co m p o u n d e d co n t in u o u s l y . Wha t w i ll b e t h e v a l u e o f t h e in v es t m e n t in 30 ye a rs ? R o u n d yo u r an s w er t o t h e n e a res t d o ll a r . Do n o t in c l u d e t h e d o ll a r s i g n in yo u r an s w er .

Amount : 3659823.44

Solution steps

Translate the problem into an equation:

A = 100000 e^{0.12 \cdot 30}

100000 e^{0.12 \cdot 30} = 3659823.44436 \dots

Round to the nearest hundredth:

3659823.44

Amount : 3659823.44