Question

A principal P is to be invested at continuous compound interest of 1.9% to yield $50,000 in 20 years. What is the approximate value of P to be invested?

Answer 1

Answer:  $34,193.07

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Work Shown:

$A = P*e^{rt}\\\\50,000 = P*e^{0.019*20}\\\\50,000 = P*e^{0.38}\\\\P = \frac{50,000}{e^{0.38}}\\\\P \approx 34,193.0704606\\\\P \approx 34,193.07$

Side note: the 'e' is a special constant roughly equal to 2.71828...