170k views
4 votes
How long (in years) would $600 have to be invested at 9%, compounded continuously, to amount to $930?

1 Answer

7 votes

It would take approximately 4.87 years for $600 to amount to $930 at 9% compounded continuously.

Sure, here is the explanation of how long it would take for $600 to amount to $930 at 9% compounded continuously.

Formula-

The formula for continuously compounded interest is:

A = P * e^(rt)

where:

A is the ending amount

P is the principal amount (initial investment)

e is the base of the natural logarithm (approximately 2.71828)

r is the annual interest rate

t is the time in years

Calculation

In this case, we are trying to find the value of t for the following:

P = $600

A = $930

r = 9% = 0.09

We can rearrange the formula to solve for t:

t = ln(A / P) / r

Plugging in the values, we get:

t = ln(930 / 600) / 0.09

t ≈ 4.87 years

Therefore, it would take approximately 4.87 years for $600 to amount to $930 at 9% compounded continuously.

User Gaurav Dhiman
by
7.6k points