Subjects finance

Continuous Interest 867Ddf

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1. **State the problem:** We need to solve the compound continuous interest formula given by $$V = 12000e^{0.65 \times 10}$$ where 12000 is the principal amount, 0.65 is the interest rate, and 10 is the time in years. 2. **Formula used:** The formula for continuous compound interest is $$V = P e^{rt}$$ where $P$ is the principal, $r$ is the interest rate, and $t$ is the time. 3. **Calculate the exponent:** Multiply the rate and time: $$0.65 \times 10 = 6.5$$ 4. **Rewrite the expression:** $$V = 12000 e^{6.5}$$ 5. **Evaluate $e^{6.5}$:** Using a calculator or approximation, $$e^{6.5} \approx 665.1416$$ 6. **Calculate the final value:** $$V = 12000 \times 665.1416 = 7,981,699.2$$ 7. **Answer:** The value after 10 years with continuous compounding is approximately $$7,981,699$$.