SOLUTION: What interest rate would be needed to double an investment in 9 years using continuous compounding?
I tried using the equation A=Principal*e^(rate*time)but am not getting anywhere
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Question 541357: What interest rate would be needed to double an investment in 9 years using continuous compounding?
I tried using the equation A=Principal*e^(rate*time)but am not getting anywhere with it. I would extremely appreciate it if you would include the formula used along with the answer.
Answer by KMST(5328) (Show Source): You can put this solution on YOUR website!
Take natural logarithms on both sides
subtract from both sides
use properties of natural logaritms
Now we how we can substitute that doubled the investment bit.
Your calculator or spreadsheet software can calculate
I calculated , meaning annual rate=7.7016%
Rounding to 7.7% (or to 7.70%) you end up a few cents short at 9 years, but maybe it's close enough.
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