Question 603052: Suppose that $1300 is invested at an interest rate of 4.5% per year, compounded continuously. After how many years will the initial investment be doubled?
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! Suppose that $1300 is invested at an interest rate of 4.5% per year, compounded continuously. After how many years will the initial investment be doubled?
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Formula for continuous compounding: A=Pe^rt, P=initial investment, r=annual interest rate, A=amount after t years
..
For given problem:
A/P=e^.045t=2
.045t*ln(e)=ln(2)
ln(e)=1 (log of base=1)
.045t=ln(2)
t=ln(2)/.045≈15.4 yrs
ans:
The initial investment will double in about 15 years
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