We want to find the amount in a continuously compounded account for the given conditions.
Principal:& $500
Annual Interest Rate:& 4.9 %
Time:& 2.5 yearsTo do so, we will start by recalling the formula for continuously compounded interest.
A( t)= P * e^(r t)
In this formula, A( t) represents the amount in the account at time t, P represents the initial value of the account or the principal, r is the annual interest rate, and t is the time in years. Let's substitute the given values into the formula. Note that r should be expressed as a decimal, so 4.9 %=0.049.
