Hassan is going to invest in an account paying an interest rate of 2.3% compounded continuously. How much would Hassan need to invest, to the nearest ten dollars, for the value of the account to reach 1,130 in 8 years?

Solution

Hassan is going to invest in an account paying an interest rate of 2.3% compounded continuously. How much would Hassan need to invest, to the nearest ten dollars, for the value of the account to reach 1, 130 in 8 years?

Solution

Principal : 940.09

Solution steps

Translate the problem into an equation:

1130 = P e^{0.023 \cdot 8}

Solve for

P, 1130 = P e^{0.023 \cdot 8} : P = 940.09

Principal : 940.09

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