Find the time it takes for 8600 to double when invested at a

Find the time it takes for $8,600 to double when invested at an annual interest rate of 18%, compounded continuously. years Preview kila Find the time it takes for $860,000 to double when invested at an annual interest rate of 18%, compounded continuously years Preview Give your answers accurate to 4 decimal places.

Solution

We use the formula:

A=P(e)^rt

where
A=Future value

P=present value

r=rate of interest

t=time period

e=2.71828

a.

(2*8600)=8600(2.71828)^(0.18*t)

2=(2.71828)^0.18t

Taking log on both sides;

log 2=0.18t*log 2.71828

t=1/0.18[log 2/log2.71828]

=3.8508 years(Approx).

b.

(2*860,000)=860,000(2.71828)^(0.18*t)

2=(2.71828)^0.18t

Taking log on both sides;

log 2=0.18t*log 2.71828

t=1/0.18[log 2/log2.71828]

=3.8508 years(Approx).