The Formula for Finding the Amount an Investment Grows to If

question 25

Short Answer

The formula for finding the amount an investment grows to if it is compounded continuously is A = Pert, A is the accumulated amount, P is the principal invested, e is the natural exponent, r is the rate per year, and t is the number of years. Find the accumulated amount A if $4,500 is compounded continuously for 6 years at 7.5% per year.

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Definitions:

United States

A country located primarily in North America, consisting of 50 states and a federal district, known for its large economy and diverse population.

Savings Rate

The proportion of disposable income that is saved by an individual or household instead of being spent.

Disposable Incomes

The financial sum available for households to spend and put aside for savings after income tax reductions.

Productivity Growth

An improvement in production effectiveness, characterized by the quantity of goods and services generated per unit of labor, capital, or other resources.