Question

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

1.31460.34

2.33294.20

3.28486.52

4. 31420.70

Answer 1

Continuous compounding is given as:

$FV=Pe^{rn}$

Where:

FV = 45946

r = 0.08

n = 4.75

$P=\frac{45946}{e^{(0.08×4.75)}}$

$P=31420.70$

Option 4) 31420.70