Question 309586: you invest $2,000 at 8.5% interest compounded continuously. how long will it take for the account balance to reach $5,000? Answer by nerdybill(7384) (Show Source):
You can put this solution on YOUR website! you invest $2,000 at 8.5% interest compounded continuously. how long will it take for the account balance to reach $5,000?
.
When you see "continuous compounding" think:
A = Poe^(rt)
where
A is amount after time t
Po is the initial amount
r is the rate/interest
t is time
.
Plugging in what was given into:
A = Poe^(rt)
we get:
5000 = 2000e^(.085t)
5000/2000 = e^(.085t)
5/2 = e^(.085t)
ln(5/2) = .085t
ln(5/2)/.085 = t
10.8 years = t
