SOLUTION: What rate of interest compounded continously is required to dobule an investment in 8 years
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Question 532060: What rate of interest compounded continously is required to dobule an investment in 8 years
Answer by htmentor(1343) (Show Source): You can put this solution on YOUR website!
What rate of interest compounded continously is required to dobule an investment in 8 years
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where
FV = future value
PV = present value
y = number of years
r = interest rate
If the investment doubles FV = 2PV
Given: y = 8 yrs
So we can write
Solve for r:
ln(2) = 8r
-> r = ln(2)/8 = 0.0866 = 8.66%
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