Rachael invests $1,000 in a bank account that pays 5% interest. How much money do will she have in 10 years if the interest is compounded co

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Rachael invests $1,000 in a bank account that pays 5% interest. How much money do will she have in 10 years if the interest is compounded continuously?

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    2021-09-10T16:42:41+00:00

    Use the formula for continuous compounding:

    A = Pe^(rt), where P is the principal amount, r is the annual interest rate expressed as a decimal fraction, and t is the number of years.

    Then A = $1000e^(0.05*10) = $1000e^0.50 = $1648.72.

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