SOLUTION: Ken has an investment account which compounds interest continuously at a rate of 3.4%. After 4 years, he has $4400 in the account. How much money did he initially place in the a

Question 1153177: Ken has an investment account which compounds interest continuously at a rate of 3.4%. After 4 years, he has $4400 in the account.
How much money did he initially place in the account?
Round your answer to the nearest dollar.
Answer by ikleyn(52943) (Show Source): You can put this solution on YOUR website!
.


An account which compounds interest continuously, works according the formula


    FV = ,


where FV is a Future value,  A is the original deposit value, r is the nominal interest and t is the time, in years.


In your problem you are given FV = 4400, r = 0.034, t = 4 years.


    4300 = .


They want you find A.


The factor   =  = 1.14568.


Therefore,  A =  = 3753.23 = 3753 dollars (rounded).    ANSWER

Solved.

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