Continuous Compound Formula

What does the principal represent in compound interest calculations?

• interest rate

• initial amount of money or investment

• final amount of money or investment

• time period

What is the formula for continuously compounded interest?

• A = P * (1 + r)^t

• A = P * e^(rt)

• A = P * (1 + rt)

• A = P * (1 - r)^t

Change 6.75% to a decimal.

• 67.5
• .675
• 675
• .0675

Change 13% to a decimal.

• 1.3

• .013

• 13

• .13

If $1,000 is invested at 16% interest, compounded continuously, for five years, what is the ending balance?

• $1,225,54
• $2,225.54
• $22,255.40
• $225.54

Mr. T invested $15,000 in an account that pays 5% interest compounding continuously, how much is in the account after 5 years? 

• $15,500.50
• $19,260.38
• $19,260.40
• $21,500.25

If $1,000 is invested at 16% interest, compounded continuously, for ten years, what is the ending balance?

• $1,225,54
• $4,953.03

• $22,255.40
• $225.54

What is 7.25% converted to a decimal?

• .725
• 0.725
• 0.0725
• 7.25

Anthony deposits $1000 in an account that pays 1.25% interest compounded continuously. How much will be in his account after 3 years?

• $1014.67

• $1038.21

• $2,003.11

• $42521.08

what does the r stand for in the equations?

• interest rate as a decimal

• radius

• range

• rational