what was his initial deposit?

Calculus
Tutor: None Selected Time limit: 1 Day

Jul 9th, 2015

Thank you for the opportunity to help you with your question! I shall do my best to help you out!

For the question, you will be using the formula to find compound interest. Usually, this formula is written as follows: A = P (1 +r/n)^nt; where A is the total amount, P is the principal/initial amount, r is the interest (as a decimal), n is the number of terms compounded, and t is the time (in years). However, because the question states compounded continuously, we would use the other equation: A= Pe^rt, where e just means that it is an exponential function. 

Using the equation, we will fill out what we are given (knowns) of the question. 

15, 000 = P (1 + 0.08/1)^(1)(2); solve the right side of the equal sign 

15, 000 = P(1.1664); we're going to bring the 1.1664 over to the other side. Because it was being multiplied with P, we're going to divide it, once moved over. 

15, 000 / 1.1664 = P 

12, 860. 08 = P 

Therefore, the initial deposit put in the bank two years ago was $12, 860.08. 


Please let me know if you need any clarification. I'm always happy to answer your questions. Thank you and take care!
Jul 9th, 2015

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