SOLUTION: Hannah wants to have $ 7500 to help pay for a new deck in 13 years. If she wants to put her money into an account earning 6.5% interest compounded continuously, how much should she

Algebra ->  Finance -> SOLUTION: Hannah wants to have $ 7500 to help pay for a new deck in 13 years. If she wants to put her money into an account earning 6.5% interest compounded continuously, how much should she      Log On


   

Question 1128658: Hannah wants to have $ 7500 to help pay for a new deck in 13 years. If she wants to put her money into an account earning 6.5% interest compounded continuously, how much should she invest now, so that she will have $ 7500 in 13 years?
Answer by greenestamps(13200) About Me  (Show Source):
You can put this solution on YOUR website!


With continuous compounding, the amount A after t years at a rate of r, with an initial principal P, is given by the formula

A+=+Pe%5E%28rt%29

So the amount P required for the beginning principal to get the final amount A is

P+=+Ae%5E%28-rt%29

For this example,

P+=+7500%2Ae%5E%28.065%2A13%29

Evaluate using a calculator....