How much money must be deposited today to become $1300 in 20 years at 7.5% compounded continuously?
Mathematics
yuvraj8148
Question
How much money must be deposited today to become $1300 in 20 years at 7.5% compounded continuously?
1 Answer

1. User Answers altavistard
Use the formula for Amount for continuous compounding:
A = Pe^(rt)
Here A = $1300, r = 0.075 and t = 20 yrs. Thus,
1300 = P*e^(0.075*20), or 1300 = P (4.482).
$1300
Solving for P: P =  = $290.07 (answer)
4.482