document.write( "Question 1001244: What interest rate, to the nearest tenth of a percent, is required for an investment subject to continuous compounding to double in 10 years? \n" ); document.write( "

Algebra.Com's Answer #618484 by addingup(3677) $\"\"$ $\"About$

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$\"A=Pe%5Ert\"$ This is the formula for compound interest. In order to isolate r, I am going to rewrite it like this:
\n" ); document.write( " $\"e%5Ert%2AP=A\"$ Divide both sides by P to simplify:
\n" ); document.write( " $\"e%5Ert=A%2FP\"$ Now, to bring the exponents down, take the log of both sides:
\n" ); document.write( " $\"rt=log%28A%2FP%29%2B%282i%29Pi%2An\"$ Divide both sides by t:
\n" ); document.write( " $\"r=+ln%28A%2FP%29%2Ft\"$ Now go and apply this formula to your problem.
\n" ); document.write( "-------------------------
\n" ); document.write( "Your problem (easiest solved by using fictitious numbers like I did):
\n" ); document.write( "r= log(1000/500)/10
\n" ); document.write( "r= log(2)/10
\n" ); document.write( "r= 0.301/10
\n" ); document.write( "r= 0.03%
\n" ); document.write( "All the best.
\n" ); document.write( "J \n" ); document.write( "

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