Question

An amount borrowed at 29% interest per year, compounded continuously, has accumulated to R38 279,20 after four years. The initial amount borrowed was

[1] R13 823,05.

[2] R12 000,00.

[3] R12 005,53.

[4] R17 721,85.

[5] R7 160,73.

Answer 1

$Future \space value=Amount\times e^{rt}$

$3827920=Amount\times e^{0.29\times 4}$

$3827920=Amount\times 3.189933$

$\frac{3827920}{3.189933}=Amount$

$Amount=1200000.022$

$Amount=1200000$

[2] R12 000,00. is correct option.