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Popular Word Problems >

Find the present value of 10,000 if the interest paid is at a rate of 8% compounded continuously for 3 years.

Solution

solve for

t h e p rese n t v a l u e o f ​10, 000 i f t h e in t eres t p ai d i s a t a r a t e o f 8​% co m p o u n d e d co n t in u o u s l y f or 3 ye a rs .

Solution

Amount : 12712.49

Solution steps

Translate the problem into an equation:

A = 10000 e^{0.08 \cdot 3}

10000 e^{0.08 \cdot 3} = 12712.49150 \dots

Round to the nearest hundredth:

12712.49

Amount : 12712.49

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