What is the present value of $1,000,000 in 40 years at 3% compounded continuously?

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asked Nov 21, 2018 13.0k views

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Dobes Vandermeer · Answer 1 · 2018-11-25T18:46:42+0000

Formula for continuous interest is A = Pe^rt

The A is the amount after interest has been applied, P is what you start with.
r is the rate and t is time in years

1000000 = Pe^(.03*40), now solve for P

P = $301,194.21

What is the present value of $1,000,000 in 40 years at 3% compounded continuously?

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