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SSC Audit Tax Finance P-II QUESTION #6176
Question 1
If you invest $1,000 today at a 10% interest rate with 'Continuous Compounding', what is the formula to find the value after 5 years?
  • $1,000 \times (1.10)^5$
  • $1,000 \times e^{0.10 \times 5}$✔️
  • $1,000 \times (1 + 0.10/12)^{60}$
  • $1,000 + (1,000 \times 0.10 \times 5)$
Correct Answer Explanation
Lesson 04 specifies that for continuous compounding, $FV = PV \times e^{i \times n}$.