Determine, to the nearest tenth of a year, how long it would taken an investment to double at a 3 3/4% interest rate, compounded

Question

2 years ago

11

continuously

1 answer:

Stella [2.4K] · Answer 1 · 2023-07-20T15:33:19+03:00

Based on the interest rate and continuous compounding, the investment would double in value after 18.5 years.

We have given that,

investment to double at a 3 3/4% interest rate,

<h3>When will the investment double in value?</h3>

The future value using continuous compounding is:

= Amount x e ^ (rate x time)

Interest is

= 3.75%

<h3>What is the formula of an exponential function?</h3>

2 = e ^ (0.0375 x time)

In2 = 0.0375 x time

t = In2 / 0.0375

t= 18.5 years

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