A business purchased for 100000 is sold after 7 years for 50

A business purchased for $100,000 is sold after 7 years for $500,000. What is the annual rate of return (compounded continuously) for this investment? Round all answers to two decimal places of percent..

A thermometer at 100 degrees Fahrenheit is brought into a room with a constant temperature of 60 degrees (F). If the thermometer is 90 degrees (F) after 4 minutes, what would be its temperature after being in the room for 12 minutes? Round all calculations to at least three decimal places and choose your answer to the nearest degree Fahrenheit.

Solution

A business purchased for $100,000 is sold after 7 years for $500,000. What is the annual rate of return (compounded continuously) for this investment? Round all answers to two decimal places of percent..

A = Pe^(r*t) where A = amount ; P = principal ;r = rate

A = $ 500,000 ; P = $ 100,000 ; t = 7 yrs

500000 = 100000e^(7r)

5 = e^7r

take natural log on both sides:

ln5 = 7r ---> r = (1/7)ln5

r =0.2299

r = 22.99% = 23%