Jacob is going to invest in an account paying an interest rate of 2.6% compounded continuously. How much would Jacob need to invest, to the nearest dollar, for the value of the account to reach 10,500 in 18 years?

Solution

Jacob is going to invest in an account paying an interest rate of 2.6% compounded continuously. How much would Jacob need to invest, to the nearest dollar, for the value of the account to reach 10, 500 in 18 years?

Solution

Principal : 6575.66

Solution steps

Translate the problem into an equation:

10500 = P e^{0.026 \cdot 18}

Solve for

P, 10500 = P e^{0.026 \cdot 18} : P = 6575.66

Principal : 6575.66

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