Question

John invests a sum of money in a retirement Account with fixed annual interest rate of 2.63% compounded continuously.After 15 years the balance reaches 1,912.41.What was the amount of initial investment

Answer 1

$ 1,289

Explanation:

p= 1289

Answer 2

Answer: The amoun of the initial value was $1,289.

Explanation:

1. To solve this problem you must apply the formula shown below:

`A=Pe^(rt)`

Where:

-
`A` is the account balance (
`A=1,912.41`).

-
`P` is the principal.

-
`r` is the annual interest (
`r=0.0263`).

-
`t` is the time in years (
`t=15`).

-
`e`=2.7182

2. You must substitute the values into the formula and then you must solve for
`P`, as following:

`1,912.41=Pe^((0.0263)(15))\\1,912.41=1.48P\\P=(1,912.41)/(1.48)\\P=1,289`