Find the present value for a $110,000 investment for 11 years at a compounded continuously at 5%.
Find the present value for a $110,000 investment for 11 years at a compounded continuously at 5%.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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![**Problem:**
Find the present value for a $110,000 investment for 11 years at a compounded continuously at 5%.
**Solution:**
To find the present value \( PV \) of an investment compounded continuously, use the formula:
\[ PV = FV \times e^{-rt} \]
where:
- \( FV \) is the future value of the investment ($110,000)
- \( r \) is the annual interest rate (5% or 0.05)
- \( t \) is the time in years (11)
- \( e \) is the base of the natural logarithm, approximately equal to 2.71828
Substitute the given values into the formula to calculate the present value.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F57a80892-6d38-4c33-b12d-e676cd98c4f8%2F39297163-a6be-459a-9302-6886d7899139%2Fbwm82fk_processed.png&w=3840&q=75)
Transcribed Image Text:**Problem:**
Find the present value for a $110,000 investment for 11 years at a compounded continuously at 5%.
**Solution:**
To find the present value \( PV \) of an investment compounded continuously, use the formula:
\[ PV = FV \times e^{-rt} \]
where:
- \( FV \) is the future value of the investment ($110,000)
- \( r \) is the annual interest rate (5% or 0.05)
- \( t \) is the time in years (11)
- \( e \) is the base of the natural logarithm, approximately equal to 2.71828
Substitute the given values into the formula to calculate the present value.
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