Michael is going to invest in an account paying an interest rate of 6.7% compounded continuously. How much would Michael need to invest, to the nearest dollar, for the value of the account to reach 100,000 in 14 years?

Solution

Michael is going to invest in an account paying an interest rate of 6.7% compounded continuously. How much would Michael need to invest, to the nearest dollar, for the value of the account to reach 100, 000 in 14 years?

Solution

Principal : 39140.99

Solution steps

Translate the problem into an equation:

100000 = P e^{0.067 \cdot 14}

Solve for

P, 100000 = P e^{0.067 \cdot 14} : P = 39140.99

Principal : 39140.99

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