Express the amount that results from 100 dollars invested at

Express the amount that results from 100 dollars invested at 5 percent compounded continuously after a period of 2 years? Set up, do not evaluate.

Solution

Formula for Compound Interest : Amount = Principal( 1+ rate/100)^time

Principal = $ 100 ; rate = 5% ; Time = 2yrs

= 100( 1+5/100)^2

= $ 110.25 Answer