Question

16. You want to purchase new, energy-saving appliances for your home in 10 years. The estimated cost is $4000. How much do you need to invest now at an annual interest rate of 6.5% compounded continuously to be able to afford them?

Answer 1

formula is

$A=Pe^{rt}$

A=4000

P=?

r=6.5% = 0.065

t=10 years

$4000=Pe^{0.065\cdot 10}$

$4000=Pe^{0.65}$

0.65 = 4000 Pe

$P=\frac{4000}{e^{0.65}}$

$P=\frac{4000}{1.91554}$

${\color{Red} P=2088.183}$