Question

An amount of money accumulates to 45946 at a continuous compounding rate of 8% per year after 57 months the original amount is

1.28 quarters

2. 41 quarters

3. 40 quarters

4.12 quarters

Answer 1

$S=e^{\delta n}P$

S=45946

$\delta=0.08$

$n=\frac{57}{12}=4.75$

$45976=e^{0.08\times4.75}P$

P=31420.79

$\frac{31420.79}{45946}=0.68$