Question

Calculate how long it takes for an amount of money to double if interest iscompounded continuously at 8.9%.It willdoublRoundA = PertContinuously Compounded Interest Formula2 = 1e0.0896

Answer 1

Given:

$2=e^{0.089t}$

Solving for t ,

$\begin{gathered} 2=e^{0.089t}\rightarrow\ln (2)=0.089t \\ \rightarrow t=\frac{\ln (2)}{0.089}\rightarrow t=7.78 \end{gathered}$

Thereby, it would take 8 years for the money to double.