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Mr. and Mrs. Green hope to send their daughter to college in fourteen years. How much money should they invest now at an interest rate of 9.5% per year, compounded continuously, in order to be able to contribute \$9500 to her education?

Solution

Mr. and Mrs. Green hope to send their daughter to college in fourteen years. How much money should they invest now at an interest rate of 9.5% per year, compounded continuously, in order to be able to contribute $9500 to her education?

Solution

Amount : 35919.91

Solution steps

Translate the problem into an equation:

A = 9500 e^{0.095 \cdot 14}

9500 e^{0.095 \cdot 14} = 35919.91218 \dots

Round to the nearest hundredth:

35919.91

Amount : 35919.91

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