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5 votes
How long (in years) would $700 have to be invested at 11.9% compounded continuously to earn $300 interest?​

User Artem Barger
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1 Answer

17 votes
17 votes

Answer:

A = Pert is formula for continuously compounded interest

A = final amount = 2000

P = principal = 1000

e = euler's number (on calculator)

r = interest rate as decimal = .075

t = time in years

Your mistake is that 7.5% as a decimal is 7.5/100 = .075

not 7.5

2000 = 1000e.075t

e.075t = 2000/1000

e.075t = 2

take natural log of both sides

ln e.075t = ln 2

.075t = ln 2

t = ln2/.075

t = 9.24 years

User Superkhau
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