SOLUTION: find the presented value of $40,000 due in 4 years at the given rate of interest 5%/year compounded continuously

SOLUTION: find the presented value of $40,000 due in 4 years at the given rate of interest 5%/year compounded continuously

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Question 1110088: find the presented value of $40,000 due in 4 years at the given rate of interest 5%/year compounded continuously
Answer by jorel1380(3719) (Show Source): You can put this solution on YOUR website!
40000=PV x e^.05t, where PV is present value and t is time, in years. Then:
40000=PV x e^.2
ln 40000=ln PV + ln e^.2=ln PV + .2 ln e= ln PV + .2
ln PV=10.4
PV=32749.23 as the present value of the amount
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