Question

Find the present value, using the present value formula and a calculator.

Achieve $225,500 at 8.65% compounded continuously for 8 years, 135 days.

Answer 1

1 + continuous rate = e^(annual rate)
where 'e' is the mathematical constant 2.718281828
1 + continuous rate = 2.718281828^.0865
1 + continuous rate = 1.0903513677
continuous rate = .0903513677 or 9.03513677%

Total = princ*(1.0903513677)^8.3698630137
Principal = Total / (1.0903513677)^8.3698630137
Principal = 225,500 / 2.0626532728

Principal = $109,325.21

Answer 2

thank you so much :)