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

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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(52932) About Me  (Show Source):
You can put this solution on YOUR website!
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An account which compounds interest continuously, works according the formula


    FV = A%2Ae%5E%28rt%29,


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 = A%2Ae%5E%280.034%2A4%29.


They want you find A.


The factor  e%5E%280.034%2A4%29 = 2.71828%5E%280.034%2A4%29 = 1.14568.


Therefore,  A = 4300%2F1.14568 = 3753.23 = 3753 dollars (rounded).    ANSWER

Solved.