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29 July, 11:09

How much money invested at 5% compounded continuously for 3 years will result in $852

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  1. 29 July, 11:32
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    Step-by-step explanation:

    Rate of interest is 5%.

    Time = 3years

    Amount = $852

    Then, we need to find P

    Generally compound interest is given as

    A=P (1+r/n) ^nt

    A=final amount

    P=initial principal balance

    r=interest rate

    n=number of times interest applied per time period=12

    t=number of time periods elapsed

    A=P (1+r/n) ^nt

    852=P (1+0.05/12) ^ (12*5)

    852=P (1+0.004167) ^60

    852=P (1.004167) ^60

    852=1.2834P

    Then, P=852/1.2834

    P=$663.88

    Then the principal amount invested is $663.88

    Approximately $664
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