Question

Find the time it takes for $281,200 to double when invested at an annual interest rate of 2.8%, compounded continuously. Give your answer to 2 decimal places.

Answer 1

Explanation:

Continuous compounding formula :

FV = PF e^rt

FV = future value = 2

PV = present value = 1

r = decimal interest per year = .028

t = years

2 = e^(.028 * t) ln both sides

ln2 = .028 t

t = 24.76 years