Answer:
$7734.82
Explanation:
You want to know the amount that will result in $20,000 after 20 years when 4.75% interest is compounded continuously.
Continuous compounding
The formula for account value is ...
A = P·e^(rt)
We want to find P when A=20,000, r=0.0475, and t=20.
20000 = P·e^(0.0475·20)
P = 20000·e^(-0.0475·20) ≈ 7734.82
You would have to deposit $7734.82 in the account to have $20,000 in 20 years.
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