Vivian opened a savings account 8 years ago. The account earns 9% interest, compounded continuously. If the current balance is 400.00, how much did she deposit initially?

Solution

Solution

Principal : 194.7

Solution steps

Translate the problem into an equation:

400 = P e^{0.09 \cdot 8}

Solve for

P, 400 = P e^{0.09 \cdot 8} : P = 194.7

Principal : 194.7

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