Question

The amount of $300 was deposited into a continuously compounded interest account that paid 0.5% interest per year. Which of the following expressions would be used to

determine the number of years it would take for the account to have a balance of $600?

Answer 1

The expression that can be used to determine the number of years that it would take to have a balance of $600 is In2 ÷ In
`e^(0.005)`.

How long would it take to have a balance of $600?

When an amount is compounded continously, it means that both the amount deposited and the interest already accrued increases in value continously over a period of time.

Time = In(FV/PV) ÷ In(
`e^(0.005)`

In2 ÷ In
`e^(0.005)`