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What is the compound interest if $134,000 is invested for 2 years at 7% compounded continuously.The interest is $. (Round to 2 decimal places.)

Sagot :

For a initial amount invested P at an annual interest rate r, after t years the total amount will be:

[tex]T=P\cdot(1+r)^t[/tex]

Then, the interest is given by:

[tex]I=T-P[/tex]

For P = $134,000, t = 2 years and r = 7%, we have:

[tex]\begin{gathered} T=134000\cdot(1+0.07)^2 \\ T=\text{ \$153,416.60} \\ I=T-P=153,416.60-134,000=\text{ \$19,416.60} \end{gathered}[/tex]

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