Can someone please help me with this compounded continuously problem?

Question

How much money must be deposited today to become $2,300 in 50 years at 6.5% compounded continuously?

The deposit must be $___???????___

Answer 1

Hi,

Compounded continuously uses the formula:

A = Pe^(rt) "e" is a special number that has a button on scientific calculators.

2300 = pe^(.065*50)

2300 = Pe^3.25

2300/(e^3.25) = P

$89.19 = P ( I always round the penny up to be sure you don't missed by a penny or two at the end.)

I hope that helps!! :-)

Answer 2

2300 = Pe^(50*.065) = Pe^ 3.25
P = 2300/e^3.25 = $89.18

Answer 3

2300=P*e^(.065*50)
P = 2300/e^(.065*50)
= 89.18