SOLUTION: A promissory note will pay $48,000.00 at maturity 9 years from now. If you pay $27,000.00 for the note now, what rate compounded continuously would you earn?

Question 1154740: A promissory note will pay $48,000.00 at maturity 9 years from now. If you pay $27,000.00 for the note now, what rate compounded continuously would you earn?
Answer by ikleyn(52921) (Show Source): You can put this solution on YOUR website!
.


48000 = 


 = 


1.777778 = 


Take log base 10 of both sides


log(1.77778) = 


log(1+r) =  = 0.027764

1 + r =  = 1.066

r = 1.066 - 1 = 0.066 = 6.6%.      ANSWER

Solved.

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