Solve this question.
Answers
Answer:
Step-by-step explanation:
Use formula for intrested compunded continuously which is ...
A = Pe^(rt)
A = Total Balance you will receive
P = Principal (amount you start out with)
e = The constant e (2.71818... can be foudn on your calculator)
r = Rate (Remember to convert to decimal form out of a whole)
t = Time
Lets assemble the equation for balance after 1 year...
A = 2000e^(.06x1)
A = $2123.67
So after 1 year, your balance is $2123.67
To find balance after 2 years, just substitute (t) for 2
A = 2000e^(.06x2)
A = $2254.99
After 2 years, your balance is $2254.99
Hope this helps
EDIT for the sake of clarifying what compounding continuously means, compared to compounding annually, semi annually, quarterly, etc... etc (I will try my best)
Continuous compounding can be thought of as making the compounding period infinitesimally small; therefore achieved by taking the limit of n to infinity.
Think of it as compounding continuously is an asymptote, you can compound annually, semi annually, quarterly, monthly, daily, even per second. Going down this progressive series approaches this asymptote which increasingly gets smaller but never crosses, so we substitute it with infinity. The asymptote is what we are compounding and can be found with A = Pe^(rt)
✨✨see this pic...✨✨
¯\_(ツ)_/¯
⚡⚡Follow me⚡⚡
