SOLUTION: Find the principal needed now to get the given amount, that is, find the present value. To get $90 after 1 1/2 years at 6% compounded continuously The present value of $90 is

Question 1087644: Find the principal needed now to get the given amount, that is, find the present value.
To get $90 after 1 1/2 years at 6% compounded continuously
The present value of $90 is $?
(round to the nearest cent as needed)
Answer by mathmate(429) (Show Source): You can put this solution on YOUR website!
Question:
Find the principal needed now to get the given amount, that is, find the present value.
To get $90 after 1 1/2 years at 6% compounded continuously

Solution:
Amount after t years compounded continuously at rate r from present value P is given by:
F=Pe^(rt)
substituting
$90=Pe^(0.06*1.5)
=>
P=$90/(e^(0.05*1.5)=$90/1.09417=$82.25 [present value]
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