Answer:
Part a)
Part b)
Step-by-step explanation:
we know that
The formula to calculate continuously compounded interest is equal to
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
e is the mathematical constant number
Part a) What is the amount after 2 years?
we have
substitute in the formula above
Part b) How long will it take for the amount to be $8000?
we have
substitute in the formula above and solve for t
Applying ln both sides
Remember that
ln(e)=1