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How much money needs to be deposited now into an account to obtain $2,800 in 8 years if the interest rate is 2% per year compounded continuously? If you do not have an e key use e = 2.7183 Round your answer to 2 decimal places

How much money needs to be deposited now into an account to obtain $2,800 in 8 years if the interest rate is 2% per year compounded continuously? If you do not have an e key use e = 2.7183 Round your answer to 2 decimal places

Advanced Engineering Mathematics
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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How much money needs to be deposited now into an account to obtain $2,800 in 8 years if the interest rate is 2% per year compounded continuously? If you do not have an e key use e = 2.7183 Round your answer to 2 decimal places
Transcribed Image Text:How much money needs to be deposited now into an account to obtain $2,800 in 8 years if the interest rate is 2% per year compounded continuously? If you do not have an e key use e = 2.7183 Round your answer to 2 decimal places
Expert Solution
Step 1: Formula used and given.

Continuous compound interest formula: The continuous interest formula is given below,

FV=Pert, where FV is future value,  P is principle or initial amount, r is rate of interest and t is compounding period in years.

Given: FV=$2800, r=2%=0.02 and t=8 years.

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