Deondra is going to invest in an account paying an interest rate of 4.7% compounded continuously. How much would Deondra need to invest, to the nearest hundred dollars, for the value of the account to reach 30,000 in 10 years?

Solution

Deondra is going to invest in an account paying an interest rate of 4.7% compounded continuously. How much would Deondra need to invest, to the nearest hundred dollars, for the value of the account to reach 30, 000 in 10 years?

Solution

Principal : 18750.07

Solution steps

Translate the problem into an equation:

30000 = P e^{0.047 \cdot 10}

Solve for

P, 30000 = P e^{0.047 \cdot 10} : P = 18750.07

Principal : 18750.07

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