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Popular Word Problems >

Peyton is going to invest in an account paying an interest rate of 4.2% compounded continuously. How much would Peyton need to invest, to the nearest cent, for the value of the account to reach 39,000 in 17 years?

Solution

P ey t o n 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 4.2% 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 P ey t o n n ee d t o in v es t, t o t h e n e a res t ce n t, 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 39, 000 in 17 ye a rs ?

Solution

Principal : 19097.58

Solution steps

Translate the problem into an equation:

39000 = P e^{0.042 \cdot 17}

Solve for

P, 39000 = P e^{0.042 \cdot 17} : P = 19097.58

Principal : 19097.58

Popular Examples

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