How long will it take $5500 to grow to $7400 at an interest rate of 5% it the interest is compounded continuouslyRound the numbe

Question

3 years ago

8

r of years to the
nearest hundredth
see score

1 answer:

Thepotemich [5.8K] · Answer 1 · 2022-09-29T23:33:48+03:00

Answer:

5.93 years

Step-by-step explanation:

The continuous compounding formula tells you the amount after t years will be ...

A = Pe^(rt) . . . . principal P compounded continuously at annual rate r for t years

7400 = 5500e^(0.05t)

ln(7400/5500) = 0.05t . . . . divide by 5500, take natural logs

t = 20×ln(74/55) ≈ 5.93

It will take about 5.93 years for $5500 to grow to $7400.