calc_tutorial_5_8_037
Problem Statement
{10,11,12,13,14,15,16,17,18,19,20}
1000*20
{4,5,6}
5-2
3/100
5*0.03
5*3
20000*0.03
20000*5/100
2.718281828
round(20000/pow(2.718281828,0.15),2)
How much must one invest today in order to receive $20000 after 5 years if interest is compounded continuously at the rate r = 3%?
Step 1
If P0 dollars are deposited into an account earning interest at an annual rate r compounded continuously, then the value of the account after t years is .
Question Sequence
Question 1
The desired value of the account after 5 years is $20000, or P(5) = .
Interest is compounded continuously at a rate of 3%, so we let r = .
Using , express P(5) in terms of P0.
| A. |
| B. |
| C. |
| D. |
Correct.
Incorrect.
Step 2
Since P(5) = 20000, we have 20000 = P0e0.15.
Question Sequence
Question 2
Solve for P0 rounded to the nearest cent.
20000 = P0e0.15.
P0 ≈ $
Incorrect. Do you see where you went wrong?
Excellent work.