If Tanisha has $100 to invest at 8% per annum compounded monthly,
how long will it be before she has $200?
Divide both sides by 100
Take natural logs of both sides:
Use the principle of logs to change an exponent
to a coefficient:
In 8 years and 8 months she will have a little less than $200.
In 8 years and 9 months she will have a little more than $200.
If the compounding is continuous, how long will it be?
Divide both sides by 100
Take natural logarithms of both sides
In 8 years and 7 months she will have a little less than $200.
In 8 years and 8 months she will have a little more than $200.
A little bit quicker with continuous compounding but there is
very little difference.
Edwin