The function #f(t)=Pe^(rt)# describes the amount #P# will become if invested for #t# years at #r%# per annum compounded continuously. If a sum becomes #$246.40# at #4%# in #4# years, what is the amount invested?

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Answer 1 · 2017-06-20T12:44:40

#P~=210#

As we have the function #f(t)=Pe^(rt)# and #f(4)=246.4#

we have #246.4=Pe^(0.04xx4)=Pe^(0.16)#

Hence #P=246.4/e^(0.16)=246.4/1.173510871=209.968~=210#