Question

Khloe is going to invest $7,100 and leave it in an account for 9 years. Assuming the interest is compounded continuously, what interest rate, to the nearest hundredth of a percent, would be required in order for Khloe to end up with $12,600?

Answer 1

For this case we can use the following formula:

`A=Pe^(rt)^{}`

and for this case we have the following:

P= 12600

A= 7100

t = 9 years

And r is the value that we need to find, so we can do the following:

`12600=7100e^(9r)`

We can do the following:

`\ln ((12600)/(7100))=9r`

And we got for r:

`r=(\ln ((12600)/(7100)))/(9)=0.0637`

And then the rate would be:

6.37%