How much would 500 invested at 5 percent interest compounded continuously be worth after 8 years?

Answer 1

"Compounded continuously" is a meaningless phrase ... we hope your bank or broker didn't quote it to you that way. In order to calculate a future value, you absolutely have to know how often the compounding takes place ... annually, daily, hourly, etc. ? The best compounding you're going to see is 'daily', so let's do it that way. If the actual compounding is any less frequent than 'daily', the actual value will be less than what we're about to calculate: 5 percent annual interest rate = (5/365) = 0.0136986 percent daily (rounded). (1.000136986)(365 x 8) = 1.4917838 (rounded) That's the value of $1 invested at 5% compounded daily for 8 years. Your $500 would become ($500 x 1.4917838) = $745.89