PLEASE HELP exponential and log word problem

Question

Bailey is saving money to buy a new car in 2 years. Find the amount she needs to invest now in a certificate of deposit that pays 10 percent compounded continuously in order to have $5000 for her car. Use A=Pe^{rt}to find this amount

Answer 1

Assuming as per the problem definition the target amount A = $ 5,000, the annual rate r=0.1 (decimal equivalent of 10%), investment time period of 2 years, and solving the following exponential equation to find the answer for principal (original) amount P:

 

$5000 = Pe^(.1)x2 

 

P = $5000/e^0.2  or approximately: P = $4093.65 (the answer)