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?
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
$\displaystyle
A=A_0(1+x)^n$ where
$\displaystyle A = 2A_0$
$\displaystyle x = 0.123$
$\displaystyle n = n$
$\displaystyle 2 = (1+0.123)^n$
$\displaystyle nln(1.123)= ln(2)$
$\displaystyle n = ln(2)/ln(1.123) = 5.98 years$