Answered

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How much should be invested now at an interest rate of 6.5% per year, compounded continuously l, to have $3500 in four years.Round your answer to the nearest cent.

Sagot :

Okay, here we have this:

Considering the provided information we are going to replace in the formula of continuous compound interest:

[tex]\begin{gathered} A=Pe^{rt} \\ 3500=Pe^{(0.065\cdot4)} \end{gathered}[/tex]

Now, let's solve for P:

[tex]\begin{gathered} P=\frac{3500}{e^{0.26}} \\ P=$2,698.68$ \end{gathered}[/tex]

Finally we obtain that should be invested $2,698.68.

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