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21 November, 05:49

A savings account earns 4.62% annual interest, compounded continuously. After approximately how many years will a principal of $500 double?

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Answers (2)
  1. 21 November, 06:00
    0
    Solve for "years" (t)

    A=P e^ (rt)

    A=1000

    P=500

    e=e

    r=0.0462

    Solve for t: use natural logarithms

    (0.0462) t=in 2

    t=15 years
  2. 21 November, 06:09
    0
    2p=pe^rt

    2=e^rt

    2=e^0.0462t

    0.0462t=log (2) / log (e)

    t=0.6931471805/0.0462

    t=15 years
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