Question

A bank account earned 3.5% continuously compounded annual interest. After the initial deposit, no deposits or withdrawals were made. At the end of an 8 year period, the balance in the account was $13231.30. What was the dollar amount of the initial deposit? Round your answer to the nearest dollar. Do not include a dollar sign ($) or comma in your answer.

Answer 1

Answer:

$\large \boxed{\ 10000.00}$

Step-by-step explanation:

We can use the formula for continuously compounded interest.

$\begin{array}{rcl}A & = & Pe^{rt}\\13231.30& = & Pe^{0.035 \times 8}\\& = &Pe^{0.28}\\& = & P\times 1.3231298\\P & = &\dfrac{13231.30}{1.3231298}\\\\&=&\mathbf{10000.00}\\\end{array}\\\text{The initial deposit was \large \boxed{\mathbf{\ 10000.00}} }$