document.write( "Question 269225: Kimberly invested $7000 in her savings account for 4 years. When she withdrew it, she had $7705.31. Interest was compounded continuously. What was the interest rate on the account? \n" ); document.write( "

Algebra.Com's Answer #197348 by dabanfield(803) $\"\"$ $\"About$

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Kimberly invested $7000 in her savings account for 4 years. When she withdrew it, she had $7705.31. Interest was compounded continuously. What was the interest rate on the account? \r
\n" ); document.write( "\n" ); document.write( "The formula for compound continuous interest is:\r
\n" ); document.write( "\n" ); document.write( "A = P*e^(rt)\r
\n" ); document.write( "\n" ); document.write( "In this case A = 7705.31, P = 7000, and t = 4 so:\r
\n" ); document.write( "\n" ); document.write( "7705.31 = 7000*e^(4r)\r
\n" ); document.write( "\n" ); document.write( "e^(4r) = 7705.31/7000\r
\n" ); document.write( "\n" ); document.write( "Taking the natural log of both sides above we get:\r
\n" ); document.write( "\n" ); document.write( "Ln (e^(4r)) = Ln (7705.31/7000)\r
\n" ); document.write( "\n" ); document.write( "Using the fact that Ln (e^a) = a the left side becomes: \r
\n" ); document.write( "\n" ); document.write( "4r = Ln(7705.31/7000)
\n" ); document.write( "r = [Ln(7705.31/7000)]/4\r
\n" ); document.write( "\n" ); document.write( "Use natural log tables and calculate r. \n" ); document.write( "

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