Find the compound amount and compound interest on $1000 invested at 6% compounded continously for 3 years. Use e ~ 2.71828 (Round value of exponential expression upto 4 decimal places.)



Answer :

Answer:

To find the compound amount and compound interest on $1000 invested at 6% compounded continuously for 3 years, we use the formula:

Compound Amount = Principal Amount × e^(rate × time)

Compound Interest = Compound Amount - Principal Amount

Plugging in the values:

Principal Amount = $1000

Rate = 6% = 0.06

Time = 3 years

e ≈ 2.71828

Compound Amount = $1000 × e^(0.06 × 3)

Compound Interest = Compound Amount - $1000

Calculating the Compound Amount:

Compound Amount = $1000 × 2.71828^(0.18) ≈ $1191.7466

Calculating the Compound Interest:

Compound Interest = $1191.7466 - $1000 ≈ $191.7466

Therefore, the compound amount is approximately $1191.7466, and the compound interest is approximately $191.7466.