Question

Present Value of an Investment Diego deposited a certain sum of money in a bank 3 years ago. If the bank had been paying interest at the rate of 7% compounded continuously and he has $11,000 on deposit today, what was his initial deposit

Answer 1

$3418.77

Step-by-step explanation:

the formula for calculating present value when there is continuous compounding is :

F / e^r x N

F = future value

e = 2.7182818

N = number of years

r = interest rate

$11,000 // ( e^0.07 x 3) = 3418.77