How much money invested at 5% compounded continuously for 3 years will yield $820?

Solution:

Given, the percentage at which the money is invested, r = 5%

Number of years, n = 3 years

Final amount after 3 years, A = $820

We have to find the amount of money invested i.e.principal amount.

Given that, the money is compounded continuously.

So, the compound interest is A = P(1 + r/100)n

820 = P(1 + 5/100)3

820 = P(1 + 1/20)3

820 = P(21/20)3

820 = P(1.05)3

P = 820/(1.05)3

P = $708.35

Therefore, the principal amount is $708.35

How much money invested at 5% compounded continuously for 3 years will yield $820?

Summary:

The money invested at 5% compounded continuously for 3 years will yield $820 is $708.35

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