How much money, invested at an interest rate of r % per year compounded continuously, will amount to A dollars after t years? (R

Question

3 years ago

10

ound your answer to the nearest cent.)
A = 300,000, r = 3.8, t = 18

1 answer:

Alex Ar [27] · Answer 1 · 2022-01-11T16:03:09+03:00

Answer: $151377.5 should be invested.

Step-by-step explanation:

The formula for continuously compounded interest is

A = P x e (r x t)

Where

A represents the future value of the investment after t years.

P represents the present value or initial amount invested

r represents the interest rate

t represents the time in years for which the investment was made.

e is the mathematical constant approximated as 2.7183.

From the information given,

A = $300000

r = 3.8% = 3.8/100 = 0.038

t = 18 years

Therefore,

300000 = P x 2.7183^(0.038 x 18)

300000 = P x 2.7183^(0.684)

300000 = 1.9818P

P = 300000/1.9818

P = $151377.5