SOLUTION: WHat amount must be deposited into a certificate of deposit today so that the investment will grow to 20,000 dollars in 18 years if it compounded continuously at 6%?

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Question 936105: WHat amount must be deposited into a certificate of deposit today so that the investment will grow to 20,000 dollars in 18 years if it compounded continuously at 6%?
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
We will use this formula: A+=+P%2Ae%5E%28rt%29


Given info: A = 20000, r = 0.06, t = 18


Notes: P is unknown, e is a constant (e = 2.718 approximately)


A+=+P%2Ae%5E%28rt%29


20000+=+P%2Ae%5E%280.06%2A18%29


20000+=+P%2Ae%5E%281.08%29 I used a calculator here


20000%2F%28e%5E%281.08%29%29+=+P


6791.9105+=+P I used a calculator here


P+=+6791.9105


P+=+6791.91 Rounded to the nearest cent


You need to deposit $6,791.91
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