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4 votes
How much money has to be invested at 2.9% interest compounded

continuously to have $34,000 after 18 years?
A. $20,173.31
B. $20,211.34
C. $20,249.07
D. $20,186.02

1 Answer

6 votes

Answer:

None of the given options (A, B, C, D) match the correct investment amount.

Explaination:

A = P * e^(rt),

where:

A = the future amount (in this case, $34,000),

P = the principal amount (the initial investment),

e = Euler's number (approximately 2.71828),

r = the interest rate (2.9% expressed as a decimal, so 0.029),

t = the time period (18 years).

We can rearrange the formula to solve for P:

P = A / e^(rt).

Now we can plug in the given values and calculate the investment amount:

P = $34,000 / e^(0.029 * 18).

Using a calculator, we can evaluate e^(0.029 * 18) and divide $34,000 by the result to find the investment amount.

Calculating e^(0.029 * 18) gives us approximately 1.604.

P = $34,000 / 1.604 ≈ $21,179.55

User Rasoul Taheri
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