Question

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 continuously

Answer 1

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,

When will the investment double in value?

The future value using continuous compounding is:

= Amount x e ^ (rate x time)

Interest is

= 3.75%

What is the formula of an exponential function?

2 = e ^ (0.0375 x time)

In2 = 0.0375 x time

t = In2 / 0.0375

t= 18.5 years

To learn more about the compounded continuously visit:

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