achieve a million dollars in 30 years at 6% interest compounded continously

:confused:

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- Sep 12th 2007, 01:53 PMjenzbearscompounded continously
achieve a million dollars in 30 years at 6% interest compounded continously

:confused: - Sep 12th 2007, 02:00 PMJhevon
the formula for continuous compounding is the same as that for bacterial growth.

$\displaystyle P(t) = P_0 e^{rt}$

where $\displaystyle P(t)$ is the amount at time t, $\displaystyle P_0$ is the initial amount, $\displaystyle r$ is the rate of interest, and $\displaystyle t$ is the time.

you want to solve $\displaystyle 1000000 = P_0e^{0.06(30)}$ for $\displaystyle P_0$

the formula is usually written as $\displaystyle A = Pe^{rt}$ though. A is for amount, P is for principle