Question

Dale has $2,000 to invest. He has a goal to have $4,200 in this investment in 12 years. At what annual rate compounded continuously will Dale reach his goal?
Dale would reach his goal with an annual interest rate of %.
(Simplify your answer. Round to two decimal places as needed.)

Answer 1

Answer:

Dale would reach his goal with an annual interest rate of 6.18%.

Step-by-step explanation:

For compounding continuously, recall the following equation:

$A = P(e)^{rt}$

A = final amount ($4200)

P = principal amount ($2000)

r = rate (unknown)

t = time (12 years).

You'll have to use natural logs for these types of questions. Remember that ln (e) = 1.

See the work done in the attached file.

Hope this helps!