Jackie’s parents invested money at an interest rate of 6% compounded continuously. How much money did the parents invest when Jackie started his first grade to accumulate $20000 after 12 years?

Answer 1

20000 = P * e^(0.06*12) =

20000 = P * e^0.72

20000/ e^0.72 = P

9735.05 = P

Answer 2

The amount after 12 years (A) is equal to the the amount you start with (Ao) times e^rt, where r = interest rate and t = time in years.

A = Ao e^rt = (20,000)*e^(.06*12) = 20,000e^.72 = 41,088.66