SOLUTION: How long will it take Rs.20,000 to double if it can be invested at 10 % compounded continuously
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Question 481433: How long will it take Rs.20,000 to double if it can be invested at 10 % compounded continuously
Answer by mathstutor494(120) (Show Source): You can put this solution on YOUR website!
Amount A=Pe^(rt)
Where P= Principal invested for t years at an annual interest rate r compounded continuously.
Here we given
P = 20,000
A = 40,000
r = 10% (i.e. 0.1)
Substituting given data in above equation, we get
40,000 = 20,000 e^(0.1t)
Dividing both sides by 20,000 we get
2 = e^(0.1t)
ln 2 = 0.1t(ln e)
0.6931 = 0.1t ( as ln e=1)
so t = 0.6931/0.1
t= 6.931 years (say 7 years)
Ans = 7 years
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