Question

William is going to invest in an account paying an interest rate of 5.9% compounded

Answer 1

Answer:

$\ 400.92$  

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  

$t=19\ years\\ A=\ 1,230\\ r=5.9\%=5.9/100=0.059$  

substitute in the formula above

$1,230=P(e)^{0.059*19}$  

solve for P

$1,230=P(e)^{1.121}$  

$P=1,230/(e)^{1.121}$

$P=\ 400.92$