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Popular Word Problems >

Andres is going to invest in an account paying an interest rate of 2.9% compounded continuously. How much would Andres need to invest, to the nearest dollar, for the value of the account to reach 370 in 11 years?

Solution

A n d res 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 2.9% 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 n d res 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 370 in 11 ye a rs ?

Solution

Principal : 268.94

Solution steps

Translate the problem into an equation:

370 = P e^{0.029 \cdot 11}

Solve for

P, 370 = P e^{0.029 \cdot 11} : P = 268.94

Principal : 268.94

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