Question

How much money has to be invested at 2.9% interest compounded continuosly to have 34,000 after 18 years

Answer 1

`\$20,173.31`

Explanation:

we know that

The formula to calculate continuously compounded interest is equal to

`A=P(e)^(rt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

e is the mathematical constant number

we have

`t=18\ years\\ A=\$34,000\\ r=0.029`

substitute in the formula above

`34,000=P(e)^(0.029*18)`

`P=34,000/((e)^(0.029*18))=\$20,173.31`