Hakeem is going to invest in an account paying an interest rate of 3.5% compounded continuously. How much would Hakeem need to invest, to the nearest hundred dollars, for the value of the account to reach 3,700 in 15 years?

Solution

Hakeem is going to invest in an account paying an interest rate of 3.5% compounded continuously. How much would Hakeem need to invest, to the nearest hundred dollars, for the value of the account to reach 3, 700 in 15 years?

Solution

Principal : 2188.75

Solution steps

Translate the problem into an equation:

3700 = P e^{0.035 \cdot 15}

Solve for

P, 3700 = P e^{0.035 \cdot 15} : P = 2188.75

Principal : 2188.75

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