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

9%

Explanation:

Given that

The invested amount is $1,000

The future value is $2,400

The time period is 12 years

We need to find out the annual rate that compounded continously

So,

As we know that

Amount = Present value × e^(rate × time)

$2,500 = $1,000 × e^(rate × 12)

2.5 = e^(rate × 12)

ln 2.5 = 10r

ln 2.5 ÷ 10 = r

r = 9%