Question

Sally invests $5000 in an account earning 8% interest, compounded continuously. After how many years will she double her investment? [Use the formla A = Pert and round answer to the nearest tenth.

Answer 1

8.7 years

Explanation:

8.7 years is correct. Plug in 10000 for A, divide both sides by 500, then take the natural logarithm of both sides to get ln(2) = .08t. Divide by .08 to get the answer.

Answer 2

Double is double, so you can solve
.. 2 = 1*e^(.08t)
and get the correct value of t.

Taking logs,
.. ln(2) = .08t
.. ln(2)/.08 = t ≈ 8.7 . . . . years