Peyton is going to invest in an account paying an interest rate of 4.2% compounded continuously. How much would Peyton need to invest, to the nearest cent, for the value of the account to reach 39,000 in 17 years?

Solution

Peyton is going to invest in an account paying an interest rate of 4.2% compounded continuously. How much would Peyton need to invest, to the nearest cent, for the value of the account to reach 39, 000 in 17 years?

Solution

Principal : 19097.58

Solution steps

Translate the problem into an equation:

39000 = P e^{0.042 \cdot 17}

Solve for

P, 39000 = P e^{0.042 \cdot 17} : P = 19097.58

Principal : 19097.58

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