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What was the principal for continuously compounded account earning 3.9% for 15 years that

now has a balance of $2,656,586.66?
$4,768,549.11
$1,496,548.42
$1,480,000

User Dinorah
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1 Answer

3 votes

This problem is related to the concept of continuous compounding, which is a method of calculating the interest earned on an account over a certain period of time. The formula for calculating the principal amount for a continuously compounded account earning 3.9% for 15 years is as follows:

P = A/ (1 + r)^t

Where P is the principal, A is the balance after 15 years, r is the rate of interest and t is the number of years.

In this problem, P = $4,768,549.11, A = $2,656,586.66, r = 3.9% and t = 15.

Therefore, the principal for the continuously compounded account earning 3.9% for 15 years is $4,768,549.11

User JohnnyJP
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