Question

Hector invests $10,000 at age 21. He hopes the investments will be worth $150,000 when he turns 50. If the interest compounds continuously, approximately what rate of growth will he need to achieve his goal? Write your answer as a percentage rounded to one decimal place.

Answer 1

Answer:

9.33%

Step-by-step explanation:

Step one:

given

Principal= $10,000

Final amount = $150,000

time = 50-21= 29 years

Required

The rate

Step two:

to solve for the rate we can apply the formula for rate as

r = ln(A/P) /t

r= ln(150000/10000)/29

r= ln(15)/29

r=2.7080502011/29

r=0.0933

r= 0.0933*100

r= 9.33%