Following the birth of a child, a parent

Question

Following the birth of a child, a parent wants to make an initial investment P, that will grow to $40,000 for the
child's education at age 19. Interest is compounded continuously at 5%.
What should the initial investment be? Such an amount is called the present value of $40,000 due 19 years from
now.
The present value is about $
(Do not round until the final answer. Then round to two decimal places as needed.)

Kunduz · Accepted Answer

5%
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Ani tial mwestment or Principal amount = Po
time duration = 19 years
Interest rate =
Compounded amount $ 40,000
ht
C.A= Polltr
('+
This fomula is for
mxI OD compounding annually
But, we have to compound continuously, so, we use the
above formula as no.
(ext)
C. A = P x e
formula , calculating limit of

Following the birth of a child, a parent wants to make an initial investment P, that will grow to $40,000 for the child's educat