The amount A resulting from a principal amount P being invested at rate r compounded continuously for time t is given by
... A = P·e^(rt)
FIll in your given values and solve for P.
... 25000 = P·e^(0.0525·12) = P·e^0.63
... P = 25000/e^0.63 ≈ 13314.80 . . . . . divide by the coefficient of P
The amount that must be invested is $13,314.80.
An initial investment (P) compounded continuously with a rate of interest (r) in time (t) will grow to amount (Q) is given by:
Q = P * e^(rt)
Q=25000, r=0.0525, t=12
25000 = P * e^(0.0525*12)
1.8776P = 25000
P = 13314.8
