Problema Solution
How much money must be deposited today to the amount $1000 in 10 years at 5% compounded continuously?
Answer provided by our tutors
P = the money deposited (the principle)
r = 5% or 0.05
t = 10 years
A = $1,000 the future value
e = 2.71828182846
A = Pe^(r*t)
P = A/(e^(rt))
P = 1000/(e^(10*0.05)
P = 1000/(e^0.5)
P = $606.53
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$606.53 should be deposited so that in 10 years there are $1,000.