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Find the present value of $53705.69 due in 5 yr at an interest rate of 8%/year compounded continuously.

$ ?

  • math -

    dx/dt = .08 x
    dx/x = .08 dt
    ln x = .08 t + C
    x = e^(.08 t + C) = c e^.08 t
    when t = 0, x =Xo
    when t = 5 , x = 53705.69
    53705.69 = Xo e^.40
    Xo = 53705.69/e^.4 = 36,000

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