To find amount after continuous compound interest, we use the formula \( A = Pe^{rt} \), where \( A \) is amount after time \( t \), \( P \) is the principal amount, \( r \) is annual interest rate, and \( e \) is the base of the natural logarithm.

Example: Deborah and Abu deposit \(\$800.00\) into a savings account which earns \(6\%\) interest compounded continuously. They want to use the money in the account to go on a trip in \(3\) years. How much will they be able to spend?

Algebra 2

Exponential Functions