Problema Solution
suppose that $2000 is invested in an account that pays interest compounded continuously. Find the amount of time that it would take for the account to grow to $3000 at 5.75%
Answer provided by our tutors
P = $2,000 the money invested (the principle)
r = 5.75% or 0.0575
t = the time in years
A = $3,000 the future value
e = 2.71828182846
A = Pe^(r*t)
3000 = 2000e^(0.0575t)
2000e^(0.0575t) = 3000 divide both sides by 2000
e^(0.0575t) = 3/2
t = (1/0.0575) ln(3/2)
t = 7.05 years
it would take 7.05 years for the account to grow to $3,000.