Question

Bilquis is going to invest in an account paying an interest rate of 5.6% compounded continuously. How much would Bilquis need to invest, to the nearest dollar, for the value of the account to reach $84,000 in 19 years?

Answer 1

To find the amount Bilquis needs to invest for the value of the account to reach $84,000 in 19 years with an interest rate of 5.6% compounded continuously, we can use the formula A = P * e^(rt). By substituting the given values into the formula and solving for P, we find that Bilquis would need to invest approximately $31,281.

Step-by-step explanation:

To find the amount Bilquis needs to invest for the value of the account to reach $84,000 in 19 years with an interest rate of 5.6% compounded continuously, we can use the formula:

A = P * e^(rt)

Where:
A = final amount ($84,000)
P = initial investment
r = interest rate (0.056)
t = time in years (19)
e = Euler's number (~2.71828)

Substituting the given values into the formula, we get:

$84,000 = P * (2.71828)^(0.056*19)

Now, we can solve for P:

P = $84,000 / (2.71828)^(0.056*19)

Using a calculator, we find that P ≈ $31,281.88. Therefore, Bilquis would need to invest approximately $31,281 to the nearest dollar.

Answer 2

Answer: $29830

Step-by-step explanation:

Every year the amount he has (in the bank lets say) goes up by 5.6%. This can be explained as multiplying by 1.056, as it basically take the one and adds 0.056 which is equivalent to 5.6%. If we are trying to find the end value after 19 years, we would have multiplied our original value by 1.056, 19 times. We can find how much that is by calculating 1.056 to the power of 19, which equals 2.8159. This is how much the money would have increased over the 19 years. Dividing the final value by 2.8159 will get us the original value. $84,000 / 2.8159 = ~ $ 29830. I have already rounded up so this should be the answer.