Problems that involve continuous compound interest use a different equation from problems that have finitely compounded interest, but the continuous compound interest equation is also an exponential equation. We use many of the same methods for calculating continuous compound interest as we do finitely compounded interest. To calculuate compound interest, we can use logarithms and methods for solving exponential equations.
Sample Problems (8)
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Invest $3000 at 4% interest compounded continuously.
Invest $5000 at 5% interest compounded continuously.
You invest $2000 at 5% interest compounded monthly. After two years you switch your money to an account that gives 6% compounded continuously.