SOLUTION: suppose you inherit $30,000. You find an investment account that pays 6.3% interest compounded continuously. How long will you need to keep it in the account until you have $50,000
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Question 1030370: suppose you inherit $30,000. You find an investment account that pays 6.3% interest compounded continuously. How long will you need to keep it in the account until you have $50,000?
Found 2 solutions by stanbon, solver91311:
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
suppose you inherit $30,000. You find an investment account that pays 6.3% interest compounded continuously. How long will you need to keep it in the account until you have $50,000?
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A(t) = P*e^(rt)
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50,000 = 30000*e^(0.063*t)
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e^(0.063t) = 5/3
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0.063t = ln(5/3)
t = ln(5/3)/0.063
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t = 8.1 years
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Cheers,
Stan H.
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Answer by solver91311(24713) (Show Source): You can put this solution on YOUR website!
For continuous compounding,
where 
is the base of the natural logarithms.
So
\ =\ \ln\left(\frac{A}{P}\right))
\ =\ \ln(A)\ -\ \ln(P))
\ -\ \ln(P))
\ -\ \ln(P)}{r})
Plug in your numbers and do the arithmetic.
John
My calculator said it, I believe it, that settles it
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