Complete the table for a savings account in which Interest i

Complete the table for a savings account in which Interest is compounded continuously. (Round your answers to two decimal places.)

Solution

amount invested = $ 1250

annual rate = 7 1/2 % = 15/2 %

applying comntinuous compounding formula

A = P e^rt

A = 1250 e^ (.075 * 14 )

A = 3572.06

amount after 14 years = $ 3572.06

time to double

plug A = 2( 1250)

2 (1250 ) = 1250 e^.075 t

2 = e^.075t

taking natural log on both sides

ln 2 = .075t ln e

t = ln 2 / 0.075

t = 9.24

time to double is 9.24 years