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Jeriel is going to invest in an account paying an interest rate of 6.5% compounded continuously. How much would Jeriel need to invest, to the nearest cent, for the value of the account to reach 137,000 in 5 years?

Solution

Jeriel is going to invest in an account paying an interest rate of 6.5% compounded continuously. How much would Jeriel need to invest, to the nearest cent, for the value of the account to reach 137, 000 in 5 years?

Solution

Principal : 98986.25

Solution steps

Translate the problem into an equation:

137000 = P e^{0.065 \cdot 5}

Solve for

P, 137000 = P e^{0.065 \cdot 5} : P = 98986.25

Principal : 98986.25

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