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Math Help - Find the amount of time? (Checking work?)

  1. #1
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    Find the amount of time? (Checking work?)

    Find the amount of tiem required for an investment to double at a rate of 12.3% if the interest is compounded continuously.

    My work:
    Assume that P=1
    Pe^(rt)
    1e^(.123t)=2
    .123t=ln2
    .123t/.123=ln2/.123
    =5.64 years

    Yea or nay?
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  2. #2
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    e^(i*pi)'s Avatar
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    Quote Originally Posted by puzzledwithpolynomials View Post
    Find the amount of tiem required for an investment to double at a rate of 12.3% if the interest is compounded continuously.

    My work:
    Assume that P=1
    Pe^(rt)
    1e^(.123t)=2
    .123t=ln2
    .123t/.123=ln2/.123
    =5.64 years

    Yea or nay?
    Your sum is right but I think you need to use

    <br />
A=A_0(1+x)^n where

    A = 2A_0
    x = 0.123
    n = n

    2 = (1+0.123)^n

    nln(1.123)= ln(2)
    n = ln(2)/ln(1.123) = 5.98 years
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  3. #3
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    No, e^(i*pi), that would be "compounded annually". "Compounded continuously" is exactly what puzzledwithpolynomials says. His answer is correct.
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  4. #4
    Member jonah's Avatar
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    Quote Originally Posted by HallsofIvy View Post
    No, e^(i*pi), that would be "compounded annually". "Compounded continuously" is exactly what puzzledwithpolynomials says. His answer is correct.
    I agree; thus I say yea.
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