word problem math

Question

Following the birth of a? child, a parent wants to make an initial investment Upper P0 that will grow $40,000 for the? child's education at age 18. Interest is compounded continuously at 7?%.
What should the initial investment? be? Such an amount is called the present value of ?$40,000 due 18 years from now.

 

The present value is about ?$?

Answer 1

A = pe^rt

 

40000 = pe^(0.07)(18)

40000 = p(e^1.26)

40000 ≈ p(3.5254)

11,346.23 ≈ p