Asked by charles
Investment: collectable toys
Current yield 5% per month
Rick: Extreamly high
Your inital value is 1000 dollars
what is the doubling time, time to reach 1800, and value after 10 years?
Current yield 5% per month
Rick: Extreamly high
Your inital value is 1000 dollars
what is the doubling time, time to reach 1800, and value after 10 years?
Answers
Answered by
charles
This is compounded countinuously
Answered by
oobleck
5% per month compounded continuously means
A = Pe^(.05m)
To double, you need
e^(.05m) = 2
.05m = ln2
m = ln2/.05 = 13.8 months
so, slightly less than that to reach 1800 = 1000 * 1.8
In 10 years (120 months), 1000e^(.05*120) = 1000e^6 = 1000*403.4287935
A = Pe^(.05m)
To double, you need
e^(.05m) = 2
.05m = ln2
m = ln2/.05 = 13.8 months
so, slightly less than that to reach 1800 = 1000 * 1.8
In 10 years (120 months), 1000e^(.05*120) = 1000e^6 = 1000*403.4287935
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