235k views
1 vote
$7450 is invested at 8.0% compounded continuously. How long will it take for the balance to reach $14900? Round your answer to two decimal places, if necessary.

1 Answer

4 votes

Answer:

8.66 years

Explanation:

The formula for the value (A) of an investment (P) compounded continuously at annual interest rate r for t years is ...

A = P·e^(rt)

Filling in the given values, we can solve for t:

14900 = 7450e^(0.08t)

2 = e^(.08t) . . . . . divide by 7450

ln(2) = 0.08t . . . . take the natural log

t = ln(2)/0.08 ≈ 8.66

It will take about 8.66 years for the balance to reach $14900.

User Ohlin
by
5.5k points