Question

How much money needa to be deposited now into an account to obtain 9,000 in 7 years if the interest rate is 8% per year compounded continuously?

Answer 1

P: the principal, the amount invested

A: the new balance

t: the time

r: the rate, (in decimal form)

Explanation:

Ex1: If $1000 is invested now with simple interest of 8% per year. Find the new amount after two years.

P = $1000, t = 2 years, r = 0.08.

A = 1000(1+0.08(2)) = 1000(1.16) = 1160