SOLUTION: How long will it take for $1,000 to be worth $1,500 at 5% interest, compounded continuously? Round your answer to the nearest hundredth of a year.
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Question 1153872: How long will it take for $1,000 to be worth $1,500 at 5% interest, compounded continuously? Round your answer to the nearest hundredth of a year. Answer by ikleyn(52794) (Show Source):
1500 = ,
t is the time in years; "e" is the base of natural logarithm, e = 2.71828... (approx.)
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=
1.5 =
Take the natural logarithm of both sides
ln(1.5) = 0.05*t
t = = 8.109 = 8.11 years (rounded as required). ANSWER
SOLVED.
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It is a standard way to solve such problems (with continuous compounding).
