Answer:
$2215
Step-by-step explanation:
The formula for continuous compound interest is P(t) = P₀[tex]e^{rt}[/tex].
$2,400 = P₀e⁽¹⁻⁰¹⁶⁾⁽⁵⁾
Divide both sides by (e⁽¹⁻⁰¹⁶⁾⁽⁵⁾) to isolate the initial amount:
($2,400) ÷ e⁽¹⁻⁰¹⁶⁾⁽⁵⁾ = (P₀e⁽¹⁻⁰¹⁶⁾⁽⁵⁾) ÷ e⁽¹⁻⁰¹⁶⁾⁽⁵⁾
$2,400 ÷ e⁽¹⁻⁰¹⁶⁾⁽⁵⁾ = P₀
Solve:
$2,400 ÷ e⁽¹⁻⁰¹⁶⁾⁽⁵⁾ = $2215.48
P₀ = $2215.48
P₀ = $2215
Hope this helps!
