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Popular Word Problems >

Alang is going to invest in an account paying an interest rate of 5.7% compounded continuously. How much would Alang need to invest, to the nearest dollar, for the value of the account to reach 113,000 in 5 years?

Solution

A l an g i s g o in g t o in v es t in an a cco u n t p a y in g an in t eres t r a t e o f 5.7% co m p o u n d e d co n t in u o u s l y . Ho w m u c h w o u l d A l an g n ee d t o in v es t, t o t h e n e a res t d o ll a r, f or t h e v a l u e o f t h e a cco u n t t o re a c h 113, 000 in 5 ye a rs ?

Solution

Principal : 84977.61

Solution steps

Translate the problem into an equation:

113000 = P e^{0.057 \cdot 5}

Solve for

P, 113000 = P e^{0.057 \cdot 5} : P = 84977.61

Principal : 84977.61

Popular Examples

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