SOLUTION: If an investment earns 9% compounded continuously, how much should you deposit now to have 25,000 (A) 36 months from now?     (B) 9 years from now? I'm sorry if this ha

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Question 742536: If an investment earns 9% compounded continuously, how much should you deposit now to have 25,000
(A) 36 months from now?     (B) 9 years from now?


I'm sorry if this has already been answered, but I couldn't find a similar problem...
Thanks!
Answer by fcabanski(1391) About Me  (Show Source):
You can put this solution on YOUR website!
Is the interest rate an annual rate?


The formula for compound interest is A=P%2Ae%5Ert where P is principal amount, r is the annual rate, t is the time in years, A is the amount after that time, and e is the constant approx. 2.71828183


To find P...apply some algebra: A%2F%28e%5Ert%29+=+P
A. 36 months is 3 years. 25000%2F%28e%5E%28.09%2A3%29%29= $19,084.49


B. 9 years: 25000%2F%28e%5E%28.09%2A9%29%29 = $11,121.45