Asked by Travis
Suppose that $2500 is invested at an interest rate of 2.5% per year, compounded continuously. After how many years will the initial investment be doubled?
Answers
Answered by
drwls
The formula to use can be found and is derived here:
http://www.moneychimp.com/articles/finworks/continuous_compounding.htm
In your case, the answer is obtained by solving
2500*e^0.025Y = 5000
e^.025Y = 2
Y is the number of years and e = 2.71828...
0.025Y = ln2 = 0.69315
Y = 27.7 years
http://www.moneychimp.com/articles/finworks/continuous_compounding.htm
In your case, the answer is obtained by solving
2500*e^0.025Y = 5000
e^.025Y = 2
Y is the number of years and e = 2.71828...
0.025Y = ln2 = 0.69315
Y = 27.7 years
There are no AI answers yet. The ability to request AI answers is coming soon!
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.