Tyler deposits 850 into an account bearing 4 78 annual inter

Tyler deposits $850 into an account bearing 4 7/8% annual interest compounded continuously. Calculate the following; round both answers to the nearest tenth of a year. a) How long will it take his money to quadruple? b) How long will it take his money to octuple?

Solution

Since it is being compounded continuously,

the formula is,

r=39/8 % = 39/800

F=Pe^rt

a) F=4P=Pe^rt

ln4=rt

t=ln4/r = 800*ln4/39 = 28.44 years.

b) F=8P=Pe^rt

t=ln9/r = 800(ln8)/39= 42.65