Problema Solution

An account now contains $11,000 and has been accumulating interest at a 7% annual rate, compounded continuously, for 7 years. Find the initial deposit. Thank you for your help.

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An account now contains $11,000 and has been accumulating interest at a 7% annual rate, compounded continuously, for 7 years. Find the initial deposit. Thank you for your help.

 

SOLUTION:

 

FV = PV*ert

11000 = PV*e(0.07*7)

PV = 11000/e^0.49

PV = $6738.89 

 

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