Question

Complete the table assuming continuously compounded interest. (Round your answers to two decimal places.)

Initial Investment:
Annual % Rate:
Time to Double: 8 yr
Amount After 10 Years: $1700

I don't understand how to get in the initial investment of annual % rate given only the time to double and amount after 10 years.

Answer 1

to double in 8 years, you need interest rate r where

(1+r)^8 = 2
r = 0.0905 or 9.05%

So, with initial amount P, you have

P(1+.0905)^10 = 1700

Now just solve for P.

Answer 2

STEVE YOU THE MAN! THANK YOU!

Answer 3

Steve your calculations/formulas are wrong they do not work for continuous compounding sorry