Question

How much money has to be invested at 2.9% interest compounded continuosly to have 34,000 after 18 years

Answer 1

Answer:

$\ 20,173.31$  

Step-by-step explanation:

we know that

The formula to calculate continuously compounded interest is equal to

$A=P(e)^{rt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest in decimal  

t is Number of Time Periods  

e is the mathematical constant number

we have  

$t=18\ years\\ A=\ 34,000\\ r=0.029$  

substitute in the formula above  

$34,000=P(e)^{0.029*18}$  

$P=34,000/((e)^{0.029*18})=\ 20,173.31$