Question
Following the birth of a child, a parent wants to make an initial investment P 0 that will grow to $70,000 for the child's education at age 19. Interest is compounded continuously at 6%.
What should the initial investment be? Such an amount is called the present value of $70,000 due 19 years from now.
What should the initial investment be? Such an amount is called the present value of $70,000 due 19 years from now.
Answers
Reiny
x e^.06t = 70000
x = 70000/e^(.06(19))
= 22,387.33
x = 70000/e^(.06(19))
= 22,387.33