SOLUTION: Last week's profits from a dry cleaners was $2000. Suppose the $2000 is invested at interest rate k, compounded continuously, and grows to $2983.65 in 5 years. What is the intere

Question 68185: Last week's profits from a dry cleaners was $2000. Suppose the $2000 is invested at interest rate k, compounded continuously, and grows to $2983.65 in 5 years.
What is the interest rate?
Find the exponential growth function.
What will the balance be after 10 years?
When will the $2,000 double?

Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Last week's profits from a dry cleaners was $2000. Suppose the $2000 is invested at interest rate k, compounded continuously, and grows to $2983.65 in 5 years.
Formul for continuously compounded investment: A=Pe^(rt)
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What is the interest rate?
2983.65=2000e^(5k)
1.491825=e^(5k)
Take the natural log of both sides to get:
0.40=5k
k=0.8 = 8%
Interest rate is 8%
--------------------------
Cheers,
Stan H

Find the exponential growth function.
What will the balance be after 10 years?
When will the $2,000 double?

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