Determine the Principal P (To the Nearest Cent)that Will Yield $A = 500,000$

question 104

Multiple Choice

Determine the principal P (to the nearest cent) that will yield a balance of $A = 500,000$ dollars when invested at rate $r = 8.5 \%$ for 40 years, compounded continuously. Round the answer to two decimal places.

• A)$611,887.72
• B)$495,364.63
• C)$16,686.63
• D)$13,015.58
• E)$13,608.96

---

Definitions:

Intrinsic Value

The actual, fundamental value of an asset, stock, or company calculated through analysis independent of market value.

Annual

The term annual refers to something that occurs once every year, used in various contexts such as annual reports, annual meetings, or annual events.

Callable Bonds

A type of bond that can be redeemed by the issuer before its maturity date at a predetermined price.