John wants to buy a new sports car, and he estimates that he'll need to make a $3,025.00 down payment towards his purchase. It he has 34 months to save up for the new car how much should he deposit into his account if the account earns 3.88% compounded continuously so that he may reach his goal?

ajanlr

ajanlr

Answered question

2022-10-28

John wants to buy a new sports car, and he estimates that he'll need to make a $3,025.00 down payment towards his purchase. It he has 34 months to save up for the new car how much should he deposit into his account if the account earns 3.88% compounded continuously so that he may reach his goal?

Answer & Explanation

giosgi5

giosgi5

Beginner2022-10-29Added 15 answers

The formula for continuous conpounded is
P ( t ) = P 0 e r t
Now given, P ( t ) = 3.025 r = 3.88 % = 0.0388 t = 34  months = 34 12  year = 17 6  years 3025 = P 0 e 0.0388 × 17 6 P 0 = 3025 e 17 × 0.038 6 P 0 = 2710.08  dollars

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