Question

A principal P is to be invested at continuous compound interest of 1.9% to yield $50,000 in 20 years. What is the approximate value of P to be invested?

Answer 1

Answer: $34,193.07

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Work Shown:

`A = P*e^(rt)\\\\50,000 = P*e^(0.019*20)\\\\50,000 = P*e^(0.38)\\\\P = (50,000)/(e^(0.38))\\\\P \approx 34,193.0704606\\\\P \approx 34,193.07\\\\`

Side note: the 'e' is a special constant roughly equal to 2.71828...