Question 934218: You want to make an investment in a continuously compounding account over a period of 100 years. What interest rate is required for your investment to double in that time period? Round the logarithm value and the answer to the nearest hundredth.
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! You want to make an investment in a continuously compounding account over a period of 100 years. What interest rate is required for your investment to double in that time period? Round the logarithm value and the answer to the nearest hundredth.
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formula for continous compounding: A=pe^rt, p=initial investment, r=interest rate, t=years, A=amount after t-years
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A/p=2=e^rt
rtlne=ln2
lne=1
rt=ln2
r=ln2/t
r=ln2/100=0.69
What interest rate is required for your investment to double in 100 yrs? 0.69%
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