Question

How much would you have to deposit in an account with a 6.5% interest rate, compounded continuously, to have $5000 in your account 12 years later? P = $[?] Round to the nearest cent​

Answer 1

Answer: PV= $ 2292.10

Explanation:

A= P(1+r/100)^n*r

where FV is the Future vale, PV is the present value, e is the mathematical constant e (approximately 2.71828), r is the annual interest rate as a decimal, and t is the time in years

5000 = PVe^(0.065*12)

PV = 5000/e^0.78

PV = 2292.10