Question

How long will it take for an investment to triple, if interest is compounded continuously at 4%?Round to the nearest tenth of the year

Answer 1

It is necessary to employ the compound interest formula.

`A=P\cdot e^(rt)`

A=3P (data question), therefore:

`\begin{gathered} A=P\cdot e^(rt) \\ 3P=P\cdot e^(0.04\cdot t) \\ 3=e^(0.04\cdot t) \\ \ln 3=0.04t \\ t=(\ln 3)/(0.04)=25\cdot1.0986=27.5 \end{gathered}`

t=27.5