Question

How much money would you need to invest today at 3.5% annual interest compounded

Answer 1

Answer: $ 42,607.34

Step-by-step explanation:

Formula to find the accumulated amount ( compounded  continuously ):

$A= Pe^{rt}$

,where P= principal amount

r= rate of interest

t= time

As per given , we have

A = $80,000

r= 3.5% = 0.035

t= 18 years

To find : P

Put all values in formula , we get

$80000=Pe^{0.035\times18}\\\\\Rightarrow\ 80000=Pe^{0.63}\\\\\Rightarrow\ 80000=P(1.87761058)\\\\\Rightarrow\ P=\dfrac{80000}{1.87761057}\\\\\Rightarrow\ P=\dfrac{80000}{1.87761057}\\\\\Rightarrow\ P=42607.34$

Hence, $ 42,607.34  need to invest .