# Intrest rates/investment problem (pert), I just need someone to check my work

1. Nov 11, 2007

### KatieLynn

intrest rates/investment problem (pert), I just need someone to check my work:)

1. The problem statement, all variables and given/known data

1)Cindy requires $10,000 in 3 years to return to college to get and MBA degree. How much money should she ask her parent for now so that, if she invests it at 12% compounded continuously, she will have enough for school? 2)Carla just inherited a building that is worth$250,000. The building is in a high demand area, and the value of the building is projected to increase at a rate of 25% per year for the next 4 years. How much more money will she make if she waits for four years to sell the building instead of selling it now?

2. Relevant equations

P=Ae^(-rt)

3. The attempt at a solution

1)so the equation would be

P= (10,000)e^(-.12*3) which equals $6,977 correct? 2)A=Pe^(rt) A=$250,000e^(.12*4) = $679,570 so then$679,570-$250,000=$429,570

is all that correct?

2. Nov 11, 2007

### EnumaElish

Yes.
Other than r = 25% not 12%, yes.

3. Nov 11, 2007

### KatieLynn

ah yeah I did the math right, I just typed in the wrong rate for the second one