How long will it take a $800 investment to be worth $900 if it is continuously compounded at 11% per year?

Question

Joslyn Small

Mathematics

24 September, 10:39

How long will it take a $800 investment to be worth $900 if it is continuously compounded at 11% per year?

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Answers (1)

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Doofus · Answer 1

The formula is

A=p e^rt

A future value 900

P present value 800

E constant

R interest rate 0.11

T time?

We need to solve for t

T=[log (A/p) : log (e) ]:r

T = (log (900:800) : log (e)) : 0.11

T=1.07 years round your answer to get 1 year