SOLUTION: Nick deposits $8,000 into a savings account which pays 7% per year. If the account compounds continuously, find the time it takes to double his investment. (Round your answer to th

Algebra ->  Exponential-and-logarithmic-functions -> SOLUTION: Nick deposits $8,000 into a savings account which pays 7% per year. If the account compounds continuously, find the time it takes to double his investment. (Round your answer to th      Log On


   



Question 981311: Nick deposits $8,000 into a savings account which pays 7% per year. If the account compounds continuously, find the time it takes to double his investment. (Round your answer to the nearest whole year.)
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
P=8000e^rt
16000=8000e^rt
2=e^(.07)t
ln of both sides
0.693=0.07*t
9.9 years. This is consistent with the rule of 72 (easier to work with), which is better as the rule of 70.
Divide the interest rate (%) into 70, and one gets the doubling time in years.