Question

Dale has $1,000 to invest. He has a goal to have $2,400 in this investment in 12 years. At what annual rate compounded continuously will Dale reach his goal?

Answer 1

7.29%

Explanation:

Given data

Principal= $1,000

Final amount= $2,400

TIme= 12 years

The expression for the compound interest is given as

A= P(1+r)^t

Make r subject of fomula

r = ln(A/P) / t

r= ln(2400/1000)/12

r= ln(2.4)/12

r= 0.875/12

r= 0.0729

Hence the rate is 7.29%