The Compound Amount When an Investment Is Compounded Continuously Is

question 34

Multiple Choice

The compound amount when an investment is compounded continuously is A = Peni Where A = compound amount, P = original principal, n = # of years, and i = interest rate per year. Find the compound amount of an investment of $2,500 at an interest rate of 10% for 2 years if it is compounded continuously.

• A)$3,000.00
• B)$3,053.51
• C)$4,023.59
• D)$3,025.00

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Definitions:

Gain

The increase in the value of an asset or the positive difference between the selling price of an asset and its cost.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recorded as assets on the balance sheet until they are consumed or used.

Accounts Receivable

The amount owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Net Income

The total revenue minus expenses, taxes, and costs, representing the profit of a company over a specific time period.