Fatoumata is going to invest in an account paying an interest rate of 1.7% compounded continuously. How much would Fatoumata need to invest, to the nearest hundred dollars, for the value of the account to reach 6,300 in 5 years?

Solution

Fatoumata is going to invest in an account paying an interest rate of 1.7% compounded continuously. How much would Fatoumata need to invest, to the nearest hundred dollars, for the value of the account to reach 6, 300 in 5 years?

Solution

Principal : 5786.63

Solution steps

Translate the problem into an equation:

6300 = P e^{0.017 \cdot 5}

Solve for

P, 6300 = P e^{0.017 \cdot 5} : P = 5786.63

Principal : 5786.63

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