Question
marcia has $220,000 saved for her retirement. How long will it take for the investment to double in value if it earns 6% interest compounded continuously?
Answers
drwls
See http://www.moneychimp.com/articles/finworks/continuous_compounding.htm
for the exact answer (11.56 yrs), or use the "rule of 72*" and get about 12 years.
*The product of the annual interest rate and the number of years must be 72 to double your money.
for the exact answer (11.56 yrs), or use the "rule of 72*" and get about 12 years.
*The product of the annual interest rate and the number of years must be 72 to double your money.
anonymous
i didn't get the right answer :[
the answer must be 139 months
the answer must be 139 months
Anonymous
In your case,
440000=220000*e^0.06t
2=e^0.06t
ln2 = 0.06t
t= ln2/0.06
= 11.5524 years x 12 months
=139 months
440000=220000*e^0.06t
2=e^0.06t
ln2 = 0.06t
t= ln2/0.06
= 11.5524 years x 12 months
=139 months