Answer: $1203.83
Explanation: Continuous compounding is a great thing if you are earning on an investment. It says that the principal is constantly earning interest and the interest on interest is also compounding continuously. The formula for the continuous compounding is:
[tex] A = P*e^(r*t) [/tex]
where, A = $2600
e = the mathematical constant e (2.7128)
r = 11%
n = 7 years
By inputting the above variables in the formula,
[tex] $2600 = P * e^(0.11*7) [/tex]
[tex] $2600 = P * e^(0.77) [/tex]
$2600 = P * 2.159766
P = $1203.834
Therefore, the amount to be invested today will be $1203.834
