Question

An initial amount of money is placed in an account at an interest rate of per year, compounded continuously. After six years, there is in the account. Find the initial amount placed in the account. Round your answer to the nearest cent.

Answer 1

Answer:

Step-by-step explanation:

Given:

$M_0=initial \money\\M_f=final\money\\i=interest$

Compounded Continuously interest means that you gain interests all the time and furthermore, your interests generate more interests, because they are adding to the total savings.

To calculate this, just use the next formula:

$M_t = M_0e^{it}$

Where

$M_t=Money \ at \ a\ given \ time\\t=time$

Therefore:

$M_0 = \frac{M_t}{e^{it}}$