Question

Joshua is going to invest $490 and leave it in an account for 5 years. Assuming the interest is compounded continuously, what interest rate, to the nearest tenth of a percent, would be required in order for Joshua to end up with $620?

Answer 1

Answer: 4.7%

Explanation:

A=Pe^rt

A=620. P=490. t=5

620 = 490e^r(5)

620/490 = 490e^5r/490

1.2653061 = e^5r

In(1.2653061) = In(e^5r)

In (1.2653061)/5 = 5r/5

0.0470628 = r

4.70628% = r

r = 4.7%