en

English

Español

Português

Français

Deutsch

Italiano

Русский

中文(简体)

한국어

日本語

Tiếng Việt

עברית

العربية

Popular Word Problems >

Salma wants to buy a bond that will mature to \$4500 in eight years. How much should she pay for the bond now if it earns interest at a rate of 3.5% per year, compounded continuously?

Solution

S a l ma w an t s t o b u y a b o n d t ha t w i ll ma t u re t o $4500 in e i g h t ye a rs . Ho w m u c h s h o u l d s h e p a y f or t h e b o n d n o w i f i t e a r n s in t eres t a t a r a t e o f 3.5% p er ye a r, co m p o u n d e d co n t in u o u s l y ?

Solution

Principal : 3401.03

Solution steps

Translate the problem into an equation:

4500 = P e^{0.035 \cdot 8}

Solve for

P, 4500 = P e^{0.035 \cdot 8} : P = 3401.03

Principal : 3401.03

Popular Examples

One positive number is 8 times another number. Their difference is 70:Find the numbers.You invest 500 in an account that has an annual interest rate of 8%, compounded weekly for 12 years. What is the equivalent interest rate and how many times will the money be compounded? How much will you have?Grayson is going to invest in an account paying an interest rate of 4% compounded continuously. How much would Grayson need to invest, to the nearest dollar, for the value of the account to reach 15,000 in 5 years?john bought 6 apple and ate 3 , how much is he left with 54 is 48% of what number