How to solve a problem when it is compounded continuously

The video tutorial explains continuous compounding interest, starting with an investment of $2,000 at a 10% annual interest rate. It introduces the constant 'e' and its significance in continuous compounding, differentiating it from regular compounding. The tutorial provides a step-by-step guide on using the continuous interest formula and demonstrates how to perform calculations using a calculator, emphasizing the importance of correctly applying 'e' in the formula.

What is the initial investment amount mentioned in the video?

• $1,000

• $2,000

• $5,000

• $10,000

In continuous compounding, what constant is used instead of 'n'?

• i

• r

• π

• e

Which of the following remains unchanged in both regular and continuous compounding?

• The formula used

• The final amount

• The initial amount, rate, and time

• The number of compounding periods

What is the formula used to calculate the final amount in continuous compounding?

• A = P * (1 + r)^t

• A = P(1 + rt)

• A = P * e^(rt)

• A = P(1 + r/n)^(nt)

What is the final amount after 20 years of continuous compounding at a 10% rate?

• $12,000.00

• $20,000.00

• $14,778.11

• $25,000.00