Problema Solution

Achieve $225,500 at 8.85% compounded continuously for 8 years, 125 days

Answer provided by our tutors

P = principal amount (initial investment)


r = 0.0885 annual interest rate (as a decimal)


t = 8 years 125 days = 8 125/365 =5 25/73 = 390/73 number of years


A = $225,500 amount after time t


A = P* e^(rt)


P = A/(e^(rt))


P = 225500/(2.718282^(0.0885*(390/73))


e = 2.718282


P = $140,542.78


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you need to invest $140,542.78 to achieve $225,500.