SOLUTION: If Marcelle deposits $250,000 into a mutual fund which pay an annual interest rate of 5% compounded continuously. Assuming that there are no further deposits and there were no with
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Question 420664: If Marcelle deposits $250,000 into a mutual fund which pay an annual interest rate of 5% compounded continuously. Assuming that there are no further deposits and there were no withdrawals, how long must she wait before her investment reaches $1 million?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
If Marcelle deposits $250,000 into a mutual fund which pay an annual interest rate of 5% compounded continuously. Assuming that there are no further deposits and there were no withdrawals, how long must she wait before her investment reaches $1 million?
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A(t) = Ao*e^(rt)
1,000,000 = 250,000*e^(0.05t)
e^(0.05t) = 4
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Take the natural log of both sides:
0.05t = 4
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t = 80 years
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Cheers,
Stan H.
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