Question

Lillian is going to invest in an account paying an interest rate of 5.7% compounded continuously. How much would Lillian need to invest, to the nearest ten dollars, for the value of the account to reach $7,600 in 7 years?

Answer 1

Answer: $5156

Step-by-step explanation:

Given

The rate of interest is 5.7%

time t=7 years

Amount after 7 years, $A=\ 7600$

for compound interest, the Amount is given by

$\Rightarrow A=P(1+\frac{r}{100})^T$

Put values

$\Rightarrow 7600=P(1+0.057)^7\\\\\Rightarrow P=\dfrac{7600}{(1.057)^7}=5,155.71\\\\\Rightarrow P\approx \ 5156$