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Thread: Compounded continuously

  1. May 6th 2008, 08:07 PM #1
    theevilp0ptart
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    Compounded continuously

    Find out how long it takes a $3100 investment to double if it is invested at 7% compounded continuously. Round your answer to the nearest tenth of a year.

    A=Pe^{rt}

    I know I am looking for t in the formula. What do I do?
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  2. May 6th 2008, 08:13 PM #2
    Aryth
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    Step 1:

    Find out what you have

    A = 6200 = 2(3100)

    P = 3100

    r = 7\% = .07

    t = ?

    Step 2:

    Fill in what you know

    A = Pe^{rt}

    6200 = 3100e^{.07t}

    Step 3:

    Solve for unknown

    6200 = 3100e^{.07t}

    2 = e^{.07t}

    ln(2) = .07t

    \frac{ln(2)}{.07} = t

    Put that in your calculator and you're done.
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