Problema Solution
How long does it take for a deposit of $900 to double at 1% compounded continuously?
Answer provided by our tutors
P = $900 the principal
t = the time in years
r = 0.1 or 1% the annual interest rate
A = 2P the future value
the future value formula is:
A=Pe^(rt)
we plug the above values and get:
2P=Pe^(rt)
Pe^(rt) = 2P
Pe^(0.01t) = 2P divide both sides by P
e^(0.01t) = 2
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t = 69.31 years
It takes 69.31 years for the deposit to double.