Answer :
Answer:
The initial investment was of $3,610.
Step-by-step explanation:
The continuous interest formula is:
[tex]P(t) = P(0)e^{rt}[/tex]
In which P(t) is the amount of money after t years, P(0) is the initial amount invested and r is the fixed interest rate.
6.79% compounded continuously.
This means that [tex]r = 0.0679[/tex]
After 20 years, the balance reaches $14,037.16.
This means that [tex]t = 20, P(t) = 14,037.16[/tex]
What was the amount of the initial investment?
This is P(0).
[tex]P(t) = P(0)e^{rt}[/tex]
[tex]14037.16 = P(0)e^{0.0679*20}[/tex]
[tex]P(0) = \frac{14037.16}{e^{0.0679*20}}[/tex]
[tex]P(0) = 3610[/tex]
The initial investment was of $3,610.