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=future amount, 15000
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
Can you take it from here?
Do a check by the reverse calculation, to see if
P*e0.24 gives 15000.