Alejandro is going to invest in an account paying an interest rate of 3.2% compounded continuously. How much would Alejandro need to invest, to the nearest ten dollars, for the value of the account to reach 161,000 in 20 years?

Solution

Alejandro is going to invest in an account paying an interest rate of 3.2% compounded continuously. How much would Alejandro need to invest, to the nearest ten dollars, for the value of the account to reach 161, 000 in 20 years?

Solution

Principal : 84894.08

Solution steps

Translate the problem into an equation:

161000 = P e^{0.032 \cdot 20}

Solve for

P, 161000 = P e^{0.032 \cdot 20} : P = 84894.08

Principal : 84894.08

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