Question

Determine the amount of money you need to invest to have $18,000 dollars in 2 years if you Invest it at 20% annual Interest, compounded
continuously.
$28,852.84
$17,294.21
$12,065.76
$133,033.01

Answer 1

Answer:

$12,500

Step-by-step explanation:

Using the compound interest formula Accrued Amount = P (1 + r)^n

where Accrued amount = $18000

P = principal; we need to generate it

r = 20% = 0.2

n = 2

Therefore

P = Accrued amount/ (1 + r)^n

= 18000/(1+0.2)^2

= 18000/1.44

= 12,500

hence $12,500 needs to be invested