Question 314889
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The formula for determining the Future Value, *[tex \Large A], of an investment with a Present Value, *[tex \Large P], at *[tex \Large r] rate of interest compounded continuously for *[tex \Large t] years is:


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ A\ =\ Pe^{rt}]


where *[tex \Large e] is the base of the natural logarithms.


We wish to solve for *[tex \Large P] given that *[tex \Large A\ =\ 51,426.94], *[tex \Large r\ =\ 0.061] and *[tex \Large t\ =\ 5]


First rearrange the formula (multiply both sides by *[tex \Large \frac{1}{e^{rt}}]):


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ P\ =\ \frac{A}{e^{rt}}]


Then plug in the values given:


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ P\ =\ \frac{51,426.94}{e^{0.061\,\cdot\,5}}]


The rest is just some calculator work.


John
*[tex \LARGE e^{i\pi} + 1 = 0]
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