Question

An initial investment of $200 is now valued at $350. The annual interest rate is 8% compounded continuously. The

equation 200e0.08350 represents the situation, where t is the number of years the money has been invested. About
how long has the money been invested? Use a calculator and round your answer to the nearest whole number.
O 5 years
O 7 years
O 19 years
O 22 years

Answer 1

Using the formula for continuous compounding, F=Pe^rn, we will be able to determine the number of years it took P= 200 to become F= 350. We just substitute the given numbers into the equation, let F=350, P=200, and r=0.08. We will obtain n=7 years, which is the number of years for 200 to become 350.

The answer is 7