Answer: the initial deposit is $162.1
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,
r = 7% = 7/100 = 0.07
t = 3 years
A= $200
Therefore,
200 = P x 2.7183^(0.07 x 3)
200 = P x 1.234
P = 200/1.234
P = $162.1 to the nearest cent
