Question

How much should be invested now at an interest rate of 6.5% per year, compounded continuously l, to have $3500 in four years.Round your answer to the nearest cent.

Answer 1

Okay, here we have this:

Considering the provided information we are going to replace in the formula of continuous compound interest:

`\begin{gathered} A=Pe^(rt) \\ 3500=Pe^((0.065\cdot4)) \end{gathered}`

Now, let's solve for P:

`\begin{gathered} P=(3500)/(e^(0.26)) \\ P=$2,698.68$ \end{gathered}`

Finally we obtain that should be invested $2,698.68.