Question

Jocelyn is going to invest in an account paying an interest rate of 2.3% compounded
continuously. How much would Jocelyn need to invest, to the nearest hundred
dollars, for the value of the account to reach $550 in 15 years?

Answer 1

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Answer:

  $400

Step-by-step explanation:

The formula for the value of an account with interest rate r compounded continuously for t years is ...

  A = Pe^(rt)

We want to find P when A = 550, r = .023, and t = 15.

  550 = Pe^(0.023·15) ≈ 1.41199P

  P = 550/1.41199 = 389.52 ≈ 400

Jocelyn would need to invest about $400 to reach $550 in 15 years.