Question

how much money has to be invested at 3.3% interest compounded constinuously to have $45,00 after 19 years

Answer 1

The formula for continuous compounding is
\[A=Pe ^{rt}\]
where, P = principal amount (initial investment)
r = annual interest rate (as a decimal)
t = number of years
A = amount after time t
To solve this question substitute the given values and solve for P:
\[45000=Pe ^{(.033\times 19)}\]
Hint: First take natural logs of both sides of the equation.