A person invests $1,450 in an account that earns 6% annual interest compounded continuously. Find when the value of the investment reaches $

Question

A person invests $1,450 in an account that earns 6% annual interest compounded continuously. Find when the value of the investment reaches $2,500. If necessary round to the nearest tenth. The Investment will reach a value of $2.500 in approximately ____ years.

in progress 0
Josephine 3 days 2021-11-21T13:08:33+00:00 2 Answers 0

Answers ( )

    0
    2021-11-21T13:09:59+00:00

    Answer:

    Years = natural log (total / principal) / rate

    Years = natural log (2,500 / 1,450) / .06

    Years = natural log (1.724137931) / .06

    Years = 0.54472717542 / .06

    Years = 9.078786257

    Years = 9.1 (rounded)

    Step-by-step explanation:

    0
    2021-11-21T13:10:13+00:00

    Answer:

    20.7 years

    Step-by-step explanation:

    Use the “compound amount, compounding continuously” formula:

    A = Pe^(r · t)  

    Here,

    A = $2,500 = $1,450e^(0.06 · t)

    Divide both sides by $1,450:  1.724 = e^(0.06 · t)

    Taking the natural log of both sides, we obtain:

    ln 1.724 = (0.06 · t).

    Finally, we divide both sides by 0.06, obtaining:

    ln 1.724

    ———— = t = 20.7

       0.06

    The Investment will reach a value of $2.500 in approximately 20.7 years.

Leave an answer

Browse
Browse

27:3+15-4x7+3-1=? ( )