Problema Solution
Buying a car for $15,000 in 3 years. How much should be borrowed so that if money is invested at a 5% compound continuously?
Answer provided by our tutors
let
P = the money borrowed
r = 0.05 or 5%
A = $15,000 the future value
t = 3 years
A = P*e^(r*t)
15000 = P*e^(0.05*3)
P*e^(0.05*3) = 1500
P = 1500/ (e^0.15)
e = 2.718
P = 1500/ (2.718^0.15)
P = $1,291.08
the money that should be borrowed is $1,291.08.