SOLUTION: Hello! I would like to check my solution.
Mandy will require $11,000 in 2 years to return to college to get an MBA degree. How much money should she ask her parents for now so t
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Mandy will require $11,000 in 2 years to return to college to get an MBA degree. How much money should she ask her parents for now so t
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Question 85350: Hello! I would like to check my solution.
Mandy will require $11,000 in 2 years to return to college to get an MBA degree. How much money should she ask her parents for now so that, if she invests it at 9% compounded continously, will she have enough for school? Round to the nearest dollar.
Thank you Answer by ankor@dixie-net.com(22740) (Show Source):
You can put this solution on YOUR website! Mandy will require $11,000 in 2 years to return to college to get an MBA degree. How much money should she ask her parents for now so that, if she invests it at 9% compounded continously, will she have enough for school? Round to the nearest dollar.
:
The continuous interest equation: P * e^(r*t) = A
Where A is the resulting amt; P = principal; r = interest rate; t = time in yrs
:
In this problem we need to find the principal (P), A=11000, r=.09, t=2
:
P * e^(.09*2) = 11000
P * e^.18 = 11000
P =
on a good calc enter:
11000/(e^.18) = 9187.97 ~ $9188 required
:
Check solution on a calc: enter 9188 * e^.18 = 11000.03
