Question 478109: If $ 2500 is invested in an account that pays interest compounded continuously, how long will it take to grow to $ 5000 at 3%? Round to the nearest tenth.
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! If $ 2500 is invested in an account that pays interest compounded continuously, how long will it take to grow to $ 5000 at 3%? Round to the nearest tenth.
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Compound interest formula for interest compounded continuously:
A=Pe^rt, P=initial investment, r=annual interest rate, A=amount after t years
For given problem:
5000=2500e^.03t
e^.03t=5000/2500=2
take log of both sides
.03t lne=ln2
.03t*1=ln2
t=ln2/.03=23.1 years
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