Patty opened a savings account 1 year ago. The account earns 10% interest, compounded continuously. If the current balance is 6,000.00, how much did she deposit initially?

Solution

Patty opened a savings account 1 year ago. The account earns 10% interest, compounded continuously. If the current balance is 6, 000.00, how much did she deposit initially?

Solution

Principal : 5429.02

Solution steps

Translate the problem into an equation:

6000 = P e^{0.1 \cdot 1}

Solve for

P, 6000 = P e^{0.1 \cdot 1} : P = 5429.02

Principal : 5429.02

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