Question

If $15,000 is deposited in an account paying 1.5% interest per year, compounded continuously, how long will it take for the balance to reach $20,000?

Answer 1

Answer:

so time require is 19.01 year

Explanation:

given data

deposited = $15,000

interest per year = 1.5% = 0.015

future value = $20,000

solution

we apply here compounded continuously formula that is

future value =  principal × $e^{rt}$   ...................1

put here value and we get

$20,000 = $15,000  × $e^{0.015t}$

$e^{0.015t}$ = 1.33

take ln both side

0.015 t = ln ( 1.33)

t = 19.0119 year