Ashley is going to invest in an account paying an interest rate of 5.6% compounded continuously. How much would Ashley need to invest, to the nearest dollar, for the value of the account to reach 2,080 in 16 years?

Solution

Ashley is going to invest in an account paying an interest rate of 5.6% compounded continuously. How much would Ashley need to invest, to the nearest dollar, for the value of the account to reach 2, 080 in 16 years?

Solution

Principal : 849.05

Solution steps

Translate the problem into an equation:

2080 = P e^{0.056 \cdot 16}

Solve for

P, 2080 = P e^{0.056 \cdot 16} : P = 849.05

Principal : 849.05

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