Mathematics: Following the birth of a child, a parent wants to make an initial investment Upper P 0 that will grow to $70 comma 000 for the child s education at age 17. Interest is compounded continuously at 6%. What should the initial investment be? Such an amount is called the present value of $70 comma 000 due 17 years from now.

Following the birth of a child, a parent wants to

jordantotten96

24.01.2022

The initial investment would be Rs. 25243.41.

Step-by-step explanation:

Since we have given that

Amount = $70000

Rate of interest = 6%

Time period = 17 years

So, we need to find the initial investment.

Using "compound interest continuously", we get that :

$FV=PVe^{i\times t}\\\\70000=PVe^{0.06\times 17}\\\\70000=PVe^{1.02}\\\\70000=PV\times 2.773\\\dfrac{70000}{2.773}=PV\\\\25243.41=PV$

Hence, the initial investment would be Rs. 25243.41.

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hamie5124

28.01.2022

sorry don't know

Step-by-step explanation:

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