SOLUTION: Find the amount of time it will take to double an investment of $12,000, compounded continuously at 2.5% interest.
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Question 302896: Find the amount of time it will take to double an investment of $12,000, compounded continuously at 2.5% interest.
Answer by solver91311(24713) (Show Source): You can put this solution on YOUR website!
It doesn't matter how much you deposit, the time to double your investment for a given rate of interest is the same whether you deposit 10 cents or 10 million dollars. Use the rule of 72 as a sanity check -- 72 divided by the interest rate in percent is the approximate time to double your investment.
And we want
Therefore we need to find the value of 
that makes 
when 
, so
Take the natural log of both sides:
\ =\ \ln(2))
Log of an argument raised to a power is the power times the log of the argument.
\ =\ \ln(2))
But \ =\ 1)
, so
}{0.025})
Just use your calculator
Super-Double-Plus Extra Credit. How long to triple your money?
John
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