Posted by **amber** on Sunday, February 27, 2011 at 7:10am.

Cindy will require $15,000 in 2 years to return to college to get an MBA degree. How much money should she ask her parents for now so that, if she invests it at 12% compounded continuously, she will have enough for school?

- ALGEBRA 1 -
**MathMate**, Sunday, February 27, 2011 at 9:35am
The continuous interest formula is

A=Pe^{rt}

A=future amount, 15000

P=principal (unknown)

e=euler's constant, 2.71828..

r=rate of interest, 0.12 for 12%

t=time in years (for annual rate of interest), 2 years

So

15000=P*e^{0.12*2}

P=15000/(e^{0.24})

Can you take it from here?

Do a check by the reverse calculation, to see if

P*e^{0.24} gives 15000.

## Answer This Question

## Related Questions

- college math - Cindy deposited $1,000 in an account that pays 12% interest ...
- MAAAATTTTHHHHHH - Franco invests some money at 6.9%/a compounded annually and ...
- Pre Calc - how much money should i invest at 8.2% compounded continuously if i ...
- Math - How much money should be invested at an annual interest rate of 6.2% ...
- math - Jim wants to deposit money in an account to save for a new stereo system ...
- Calculus - Redo problem 8 in section 6.3 of your textbook (page 288) assuming ...
- Mathematics and investment - 1. Angelo wants to renovate his house in 3 years. ...
- algebra - Hannah invests $3850 dollars at an annual rate of 6% compounded ...
- Math - Thor invests some money in an account earning 8% interest, compounded ...
- Math and Finance - If May invests $5,000 compounded annually at 8%, how much ...

More Related Questions